UNIT 1 ECONOMICS 601 Problem set #1 Chapter 2 plus Appendix Please be neat. 50 PTS TOTAL (20 pts) 1. Provide an example of a worker who is counted as: (a) employed (b) unemployed (c) out of the labor force (d) a discouraged worker (30 pts) 2. National income: growth and inflation. Show all calculations. 2019 Price 2019 2020 Quantity Price 2020 2021 Quantity Price 2021 Quantity Peaches $20 100 $22 105 $24 110 Pears 25 $2 50 $1 100 $4 a. Compute nominal and real GDP for each year in an economy that produces only 2 goods: peaches and pears. Use 2019 as the base year. 2019 Real GDP _________ Nominal GDP ________ 2020 Real GDP _________ Nominal GDP _________ 2021 Real GDP _____________ Nominal GDP __________ b. Compute the GDP implicit price deflator for each year. Again, use 2019 as the base year. c. Find the economic growth rates and the inflation rates. Growth 2019-2020 _______________ Inflation rate ____________ Growth 2020-2021 _______________ Inflation rate ____________ d. Repeat parts (a)-(c) using 2020 as the base year. 2019 Real GDP ____________ Nominal GDP _________ 2020 Real GDP __________ Nominal GDP_____________ 2021 Real GDP ____________ Nominal GDP ____________ Growth 2019-2020 ________________ Inflation rate ___________ Growth 2020-2021 ___________________ Inflation rate __________ e. Use the chain-weighted method to compute real GDP with a base of 2019. Find the new growth rates. f. Discuss and compare your findings of the 3 methods of computing growth rates. (Using 2019, 2020, and chained estimates).