Macroeconomics, 9/e

Campbell R. McConnell, University of Nebraska, Lincoln
Stanley L. Brue, Pacific Lutheran University
Thomas P. Barbiero, Ryerson University

Introduction to Economic Growth and Fluctuations

Internet Application Questions


1		Go to: http://www.time.com/time/business/article/0,8599,130886,00.html And answer the following questions: How do the textbook and the article define the term "Recession"? What are some of the economic indications, outlined in the article, that a recession may be near? According to the article, what are the major factors that have contributed to an economic slowdown (decline in real GDP) in the U.S. (and in Canada)? What factor(s) have been stabilizing the economy? Why do economists expect any upcoming recession to be short-lived? Give evidence from the article.



2		Go to: http://www.businessweek.com/careers/content/jan1990/b3653163.htm And answer the following questions: How does the textbook define the terms: (i) Demand-pull inflation, (ii) Cost-push inflation, and (iii) The natural rate of unemployment? In 1999, when this article was written, there was a concern that the U.S. unemployment rate could be too low. Explain this concern, making use of the concepts you defined in part (a) In the article, the relationship between inflation and unemployment is discussed, and two alternative points of view are given. Briefly, explain these two points of view. In the late 1990's and into 2000, the United States experienced low unemployment and low inflation. Some economists have said this was possible because of productivity gains made due to rapidly advancing technology. Using demand and supply analysis, explain how this might be possible.

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