Question

According to the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) increased at an annual rate of 2.3 percent in the first quarter of 2018. This contrasts with the fourth quarter of 2017, when real GDP increased by 2.9 percent. According to the Bureau of Labor Statistics (BLS), the consumer price index (CPI) increased by 2.1 percent in 2017. This is the same as the rate of price inflation observed in 2016. The BLS also reports that the unemployment rate for April of 2018 fell to 3.9%, which is the lowest rate of unemployment since December of 2000. Use these data about the recent performance of the U.S. economy to classify each of the following statements as true or false.

a. The low unemployment rate Of early 2018 could have resulted from many discouraged workers leaving the labor force.
b. Growth of real output slowed between the last quarter of 2017 and the first quarter of 2018.
c. In early 2018, real output in the economy rose, while unemployment declined.
d. The prices of all domestic products and services rose in 2017.

Answer 1

a. False. The low unemployment rate of early 2018 is not necessarily the result of discouraged workers leaving the labor force. b. True. The growth of real output slowed between the last quarter of 2017 and the first quarter of 2018. c. True. In early 2018, real output in the economy rose, while unemployment declined. d. False. The prices of all domestic products and services did not necessarily rise in 2017.

Step-by-step explanation:

a. False. The low unemployment rate of early 2018 is not necessarily the result of discouraged workers leaving the labor force. The Bureau of Labor Statistics (BLS) reports that the unemployment rate fell to 3.9% in April 2018, which is the lowest rate since December 2000. This suggests that there was actually a decrease in the number of unemployed individuals.

b. True. The data provided shows that the growth of real output, as measured by real GDP, slowed from 2.9% in the fourth quarter of 2017 to 2.3% in the first quarter of 2018.

c. True. The data provided shows that real output in the economy increased between the fourth quarter of 2017 and the first quarter of 2018, as evidenced by the increase in real GDP. Additionally, the data indicates that unemployment declined during this period, as reflected in the decrease in the unemployment rate.

d. False. The information given does not provide data on the prices of all domestic products and services. It only states that the consumer price index (CPI) increased by 2.1% in 2017, which is the same rate as observed in 2016. This does not necessarily mean that the prices of all domestic products and services rose in 2017.