Question
Question 1 refers to the following statistics for an unnamed country. 1 year ago Now GDP $750 billion $700 billion GDP per capita $50,000 $45,000
Question 1 refers to the following statistics for an unnamed country.
| 1 year ago | Now | |
| GDP | $750 billion | $700 billion |
| GDP per capita | $50,000 | $45,000 |
| Unemployment rate | 6.2% | 7.3% |
| Labor force participation rate | 73% | 62% |
| Inflation rate | 0% | -5% |
| CPI | 100 | 95 |
a. Is this economy in better shape or worse shape now than it was one year ago? (That is, is this economy in an expansion or in a recession?) Justify your answer carefully and completely, being sure to incorporate each of the six pieces of information into your assessment. If you perform a calculation as part of your answer, you must show all the steps in that calculation.
b. Use Aggregate Demand-Aggregate Supply analysis to explain how the economy moved from its position one year ago to its position now. That is, what shift in Aggregate Demand or Aggregate Supply would have caused the changes in GDP, unemployment, and the price level shown in the table above?
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Financial Accounting and Reporting a Global Perspective
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
4th edition
978-1408076866
