Unemployment, Inflation, GDP Analysis - Economics Assignment

This assignment addresses key economic concepts including unemployment, inflation, and Gross Domestic Product (GDP). It explores different types of unemployment (frictional, cyclical, and structural) and inflation (cost-push and demand-pull). The assignment provides the current unemployment rate in the US and the inflation rate according to the consumer price index (CPI). It differentiates between actual and potential GDP and explains the Rule of 70, along with its implications for equity. The assignment also identifies groups that are helped and hurt by inflation. Finally, it discusses the impact of cost-push and demand-pull inflation on output. References to relevant academic resources are also provided.

Questions answer

Question and Answers.
1. Types of unemployment
 Frictional unemployment: It mainly happens due to individual randomly switching jobs
because of economic conditions.
 Cyclical unemployment: This happens with the changes in the total number of jobless
people due to sudden ups and downs in economic conditions.
 Structural unemployment: It happens due to changes in the technological changes as
people do not understand the changes.
2. Types of Inflation.
 Cost push inflation: Happen because of rise in the price of material.
 Demand pull inflation: In this economy increase quickly and become overheat.
3. Current rate of unemployment in US.
As per Bureau of labour statistic U.S. the total unemployment rate is 6.7%.
4. Rate of Inflation
According to consumer price index (CPI) the current rate of inflation in United states is 0.62%.
5. Difference between actual and potential GDP.
Actual GDP Potential GDP
This opinion that marketplace cheap workings
well if laissez faire.
The economy must be allowed of government
participation.
Depression and unemployment occur when
households
Too little private spending, govt. spending
must rise
6. Rule of 70.
It simply means, predicting the total number of years in which a single investment gets double
value.
7. Impact of rule of 70 over equity.
By taking the mass 70 by both the projected rate of economic growth or the returns on
business transactions, it is possible to obtain an approximation in years.
8. Groups helped and hurt by inflation.
Hurt group.
1. Employee with fix salary.
2. People those keep cash saving
Helped group.
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1. People with large debts.
2. Owner of large land.
9. Impact of cost push inflation & Demand pull inflation on output.
Cost push inflation: It is the downfall of supply of items and services due to increase in the
production cost which let decreasse the volume of output for a specific time.
Demand pull inflation: It is mainly controll by demand of customer in the market which lead to
increase the output.
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References
Books and Journals
Andrews, I., Gentzkow, M. and Shapiro, J. M., 2020. On the informativeness of descriptive
statistics for structural estimates. Econometrica, 88(6), pp.2231-2258.
Sharma, S. K., Kanchan, T. and Krishan, K., 2018. Descriptive statistics. The Encyclopedia of
Archaeological Sciences, pp.1-8.
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