
a)
The validity of the statement that the ideology of technical progress leading to solid increases in employment is supported by the changes in employment as well as per capita output in the US after 1900.
a)

Answer to Problem 1QAP
True
Explanation of Solution
Economic information of the US economy since the beginning of the 20th century provides enough evidence as to how technological progress has increased the level of employment. During such time, the per capita output of the nation has increased by a good 7 times. At the same reference period, the employment level has also risen 5 times. As this proves technological progress to be enhancing employment, the statement could be considered as false.
Introduction:Technical progress in any country is said to be enhancing employment levels. Since the beginning of the 20th century, many technical advancements have taken place worldwide, reshaping the economies all over.
b)
The validity of the statement that creative destruction would be equally benefited by workers.
b)

Answer to Problem 1QAP
False
Explanation of Solution
It cannot be said that all workers receive equal benefits via the process of creative destruction. For example, blacksmiths lost their profession due to creative destruction. Although some professions benefitted immensely through this, some had to immensely suffer on the other hand. Hence, the statement could be considered as false.
Introduction:Creative destruction could be defined as the process that demolished the conventional professions or ways and means of doing certain professions. They were replaced with the so called innovative methods. It is subject to debate as to how acceptable this process is.
c)
The validity of the statement that the real wage levels of workers with low skills have declined as compared against that of high skilled workers in the US across the past two decades.
c)

Answer to Problem 1QAP
True
Explanation of Solution
The statement could be considered as true as there had been declines in the real wage levels of low skilled workers in the US. On the contrary, real wages of skilled workers have shown an increase. The said changes in two opposite directions have been instrumental in widening the gap of real wages between high and low skilled workers.
Introduction:Real wage is an important concept that is widely spoken of in economics. It is the actual
d)
The validity of the statement that technological progress creates a decline in employment only if the output increase is below the productivity increase.
d)

Answer to Problem 1QAP
True
Explanation of Solution
The statement could be considered as true as technological progress in deed reduces employment under the condition that the increase in the level of productivity is beyond the increase in the output level. As workers would be paid wages that are in line with their productivity levels, there would be an increase in real wages. If the increase in real wages exceed the increase in the level of output, there would be
Introduction:Technological progress in general is considered to be reducing the level of unemployment. As these concepts are much important in economic analysis, it is worthwhile looking into the relevant conditions under which this would be so.
e)
The validity of the statement that the reduced level of natural unemployment that occurred during the latter half of the 1990’s is possible to be explained by the unexpectedly high productivity
e)

Answer to Problem 1QAP
False
Explanation of Solution
The statement could be considered to be false. As stated above, an unusual increase in the level of
Introduction:It is said that an unusually high growth rate in the aggregate output has been the reason as to why the natural rate of unemployment has declined in the second half of the 20th century in the economy of the US.
f)
The validity of the statement that if technological progress could be stopped, the natural rate of unemployment would decline as a result.
f)

Answer to Problem 1QAP
False
Explanation of Solution
The statement could be considered as false. A technological progress cannot bring down the level of natural unemployment. However, there would be possible changes in natural unemployment that has been caused by features such as higher savings. Nevertheless, technological progress being the driver of growth in the long run, the economy is more likely to be stagnant. This, in turn shall make natural unemployment constant or decrease depending on the population’s growth rate.
Introduction:Natural rate of unemployment refers to the percentage of unemployment resulting from the structural features of an economy. In other words, it is the minimum level of unemployment an economy could have.
Want to see more full solutions like this?
Chapter 13 Solutions
Macroeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (7th Edition)
- In a classic oil-drilling example, you are trying to decide whether to drill for oil on a field that might or might not contain any oil. Before making this decision, you have the option of hiring a geologist to perform some seismic tests and then predict whether there is any oil or not. You assess that if there is actually oil, the geologist will predict there is oil with probability 0.85 . You also assess that if there is no oil, the geologist will predict there is no oil with probability 0.90. Please answer the two questions below, as I am trying to ensure that I am correct. 1. Why will these two probabilities not appear on the decision tree? 2. Which probabilities will be on the decision tree?arrow_forwardAsap pleasearrow_forwardnot use ai pleasearrow_forward
- not use ai pleasearrow_forwardIn this question, you will test relative purchasing parity (PPP) using the data. Use yearly data from FRED website from 1971 to 2020: (i) The Canadian Dollars to U.S. Dollar Spot Exchange Rate (ER) (ii) Consumer price index for Canada (CAN_CPI), and (iii) Consumer price index for the US (US_CPI). Inflation is measured by the consumer price index (CPI). The relative PPP equation is: AE CAN$/US$ ECAN$/US$ = π CAN - πUS Submit the Excel sheet that you worked on. 1. First, compute the percentage change in the exchange rate (left-hand side of the equation). Caculate the variable for each year from 1972 to 2020 in Column E (named Change_ER) of the Excel sheet. For example, for 1972, compute E3: (B3-B2)/B2). ER1972 ER1971 ER 1971 (in Excel, the formula in cellarrow_forwardnot use ai pleasearrow_forward
- 8. The current price of 3M stock is $87 per share. The previous dividend paid was $5.96, and the next dividend is $6.25, assuming a growth rate of 4.86% per year. What is the forward (next 12 months) dividend yield? Show at least two decimal places, as in x.xx% %arrow_forwardJoy's Frozen Yogurt shops have enjoyed rapid growth in northeastern states in recent years. From the analysis of Joy's various outlets, it was found that the demand curve follows this pattern: Q=200-300P+1201 +657-250A +400A; where Q = number of cups served per week P = average price paid for each cup I = per capita income in the given market (thousands) Taverage outdoor temperature A competition's monthly advertising expenditures (thousands) = A; = Joy's own monthly advertising expenditures (thousands) One of the outlets has the following conditions: P = 1.50, I = 10, T = 60, A₁ = 15, A; = 10 1. Estimate the number of cups served per week by this outlet. Also determine the outlet's demand curve. 2. What would be the effect of a $5,000 increase in the competitor's advertising expenditure? Illustrate the effect on the outlet's demand curve. 3. What would Joy's advertising expenditure have to be to counteract this effect?arrow_forwardThe Compute Company store has been selling its special word processing software, Aceword, during the last 10 months. Monthly sales and the price for Aceword are shown in the following table. Also shown are the prices for a competitive software, Goodwrite, and estimates of monthly family income. Calculate the appropriate elasticities, keeping in mind that you can calculate an elasticity measure only when all other factors do not change (using Excel). For example, price elasticities, months 1-2. Month Price Aceword Quantity Aceword Family Income Price Goodwrite 1 $120 200 $4,000 $130 21 120 210 4,000 145 3 120 220 4,200 145 4 110 240 4,200 145 90 5 115 230 4,200 145 6 115 215 4,200 125 10 7899 115 220 4,400 125 105 230 4,400 125 105 235 4,600 125 105 220 4,600 115arrow_forward
- Gordon Dividend Growth Model I downloaded some data about 3M (ticker MMM). Company 3M Ticker MMM Dividends Per Share 2017 $4.70 2018 $5.44 2019 $5.76 2020 $5.88 2021 $5.92 2022 $5.96 4. The dividend payment in 2022 was $5.96 per share. Based on the five-year history, we see that dividends per share grew at a compound annual growth rate of 4.86% $5.96 (1/5) CAGR = $4.70 − 1 = (1.2681)0.20 − 1 = 1.0486 - 1 = 0.0486 = 4.86% - - What should be the 2023 dividend based on these values?arrow_forward4. The data set BWGHT.DTA contains data on births to women in the United States. Two variables of interest are the dependent variable, infant birth weight in ounces (bwght), and an explanatory variable, average number of cigarettes the mother smoked per day during pregnancy (cigs). The following simple regression was estimated using data on n=1,388 births: bwght=119.77 - .514 cigs (i) What is the predicted birth weight when cigs = 0? What about when cigs=20 (one pack per day)? Comment on the difference. (ii) Does this simple regression necessarily capture a causal relationship between the child's birth weight and the mother's smoking habits? Explain. (iii) To predict a birth weight of 125 ounces, what would cigs have to be? Comment. (iv) The proportion of women in the sample who do not smoke while pregnant is about .85. Does this help reconcile your finding from part (iii)?arrow_forwardGiven the demand equation Q following table (using Excel): = 1,500 200P, calculate all the numbers necessary to fill in the Elasticity P Q Point Arc Total Revenue Revenue Marginal $7.00 6.50 6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50arrow_forward
- Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningEconomics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning





