1. What would happen to GDP if the government hired

unemployed workers, who had been previously receiving

an amount of $TR in unemployment benefits, as

government employees and now paid them the same $TR

dollars to do nothing? Explain your answer.

2. Increases in real GDP are often interpreted as an

improvement in population welfare. What are some

problems with this interpretation? Explain.

3. If you woke up in the morning and found that nominal

GDP had doubled overnight, what statistic would you

need to check before you began to celebrate. Explain your

answer.