ECO561 DQs Week 4 - 18520

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What is the economy’s current stage in the business cycle? Support your answer with data on the real GDP growth rate, the unemployment rate, and the CPI inflation rate. You may obtain these data from the Bureau of Economic Analysis website (http://www.bea.gov/) and the Bureau of Labor Statistics website (http://www.bls.gov/).

 

  • Economic growth, as measured by increases in real GDP per capita, is a goal for most countries. This is often interpreted as an increase in economic welfare for citizens. How would you evaluate this assertion? If there are reasons to dispute it, why is it a nearly universally recognized goal? Are there better methods for measuring economic welfare? How would you measure it?

 

  • What are some of the damaging effects deflation has on an economy? What would be a monetary policy prescription to reduce or eliminate deflation? How would deflation affect your business or a business you are familiar with?

 

  • Recessions seem to show up every so often and create economic hardship. One might think that macroeconomic policymakers could tame the business cycle and implement policies that would end recessions. Are recessions a necessary fact of macroeconomic life? If not, what would it take to eliminate them? If they are unavoidable, what types of business can benefit from them? How would a recession affect your firm?
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DQ 1. What is the economy’s current stage in the business cycle?

Support your answer with data on the real GDP growth rate, the unemp

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