Savannah
Assignment 4 REAL ECON
1. Explain why an economist would focus on real GDP rather than nominal GDP.
– An economist would focus on real GDP rather than nominal GDP because real
GDP focuses on the outputs better than the nominal GDP. Real GDP gives more of an
accurate view and you can’t determine the raise in nominal GDP if from production or
price increase.
2. Suppose you walked into an unemployment office and found the following people: a
laid-off mall Santa Claus, an unemployed auto-industry worker (who is subject to
callback by their company), a woman who lost her job at a manufacturer because the
company relocated to Mexico, and a nurse who just moved to town because his wife
recently started a new job. Assign the following labels to the people above: cyclically
unemployed, frictionally unemployed, structurally unemployed, and seasonally
unemployed. Then, explain your assignment of the terms to each person.
– A laid-off mall Santa clause would be assigned the label seasonally unemployed.
This is because Christmas is only celebrated once a year and he is only needed for that
short time.
– An unemployed auto-industry worker (who is subject to callback by their