#1.

Consider a company JuiceStop who issues stocks to the public for the first time in 2022. JuiceStop

provides two shares. During 2022, JuiceStop sells one of the two shares to Emily for $21,000. Later

in the same year, Emily sells the share to Janet for $25,000. The second share, at a market value of

$24,000, is sold to Jerome. JuiceStop uses all the funds that are financed via selling stocks to Emily

and Jerome to purchase cutting-edge juicer machines produced in the U.S. The transactions just

described contributing how much to GDP for 2022? Briefly explain your answer.

#2.

Suppose the civilian noninstitutional population over age 16 is 263,444,000, the number of

employed is 158,458,000, the number of unemployed is 5,952,000 as of March 2022.

(1) What is the labor force participation rate? (%) Show how you obtain the result.

(Please round to the nearest hundredth/two decimal places: e.g. 12.357-->12.36)

(2) What is the unemployment rate? (%) Show how you obtain the result.

(Please round to the nearest hundredth/two decimal places: e.g. 12.357-->12.36)

(3) If the economy had not experienced the pandemic, an economist, Erica estimates that the labor

force participation rate would have been 63.5% as of March 2022. Given the estimation, how many

would Erica the economist reckons the number of discouraged workers to be at maximum? Show

how you obtain the result.

#4. (1) Imagine that you are in your 40s and a CEO of your own business. What is your business like?

(2) Suppose the Fed raises the federal funds rate 0.5% in May 3-4 FOMC meeting, how do you think

your business is affected by that decision?

(a) How would the demand of your customers change? Consider the direct effect on consumers

borrowing costs and indirect effects on inflation.

(b) How would the current interest payments (borrowing costs) of your business change?

(C) In order to remain competitive in the market, your business has to adopt cutting-edge

technology in the industry. Your competitors are considering such investment. Would you like to

invest more despite of the higher borrowing costs?