Question

Question 1

What is the difference(s), if any, between the unemployment rate and the natural rate of unemployment? Discuss.

Question 2

The expenditure approach (the sum of all spendings) to measuring the value of the nation's output (GDP) is equivalent to the income approach (the sum of all payments to factors). Discuss and illustrate with examples(s) where necessary.

Question 3

Real GDP is the same as nominal GDP? If yes, why? If no, why? Discuss

Question 4.

Does GDP provide an accurate measure of the well-being of the population in a country? Yes or No. Discuss and offer examples where necessary.

Question 5 .

Consumption expenditure has always been and continues to be the largest expenditure of GDP. If true explain. If false , explain.

Answer 1

1. Unemployment rate is the percentage of people who are unemployed in the labor force. The natural rate of unemployment means the minimum unemployment when economy is fully utilising its all resources. Natural rate of unemployment includes structural and frictional unemployment but not the cyclical unemployment. When economy is below full employment GDP then unemployment rate > natural rate of unemployment and when economy is above full employment GDP then unemployment rate < natural rate of unemployment.

(Note: As per Chegg's policy, one question is to be answered at a time.)