Instructions: Comments on the following questions in details and in your own words. Be sure to provide “complete” and “thorough” responses; failure to do so will simply result in points being deducted. It is also important to provide examples to support the points / definitions you are trying to make.
1. What are the FOUR key components that made up a macroeconomy under the expenditure approach AND which one of the FOUR is related to disposable personal income (DPI). Be sure to state how. In other words, out of the FOUR components, which one is influenced by DPI? Be sure to state how.
2. In your own words, provide a complete definition of Gross Domestic Product (GDP).
3. Provide 3 examples or economic activities which would not be included in GDP.
4. Define Fiscal Policy and what should the government do with fiscal policy in order to pull the economy out of a recession?
5. Define transfer payments and provide 3 examples.
6. Watch the following Youtube video on the various types of unemployment and answer the following questions:
Macro: Unit 1.4 — Unemployment (Links to an external site.)
— a. what are the different types of unemployment as presented in the video?
— b. out of the different types of unemployment, which types cannot be at zero percent and why?
— c. out of the different types of unemployment, which type is relating negatively to the economy’s business cycle?
— d. according to the video, what range (in percentage) of unemployment is considered the natural rate? And what does that consist of?