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

Answer:

a. The low unemployment rate Of early 2018 could have resulted from many discouraged workers leaving the labor force.

FALSE, the economy was growing during 2017 and 2018, so the fall in unemployment levels is reasonable.

b. Growth of real output slowed between the last quarter of 2017 and the first quarter of 2018.

TRUE, it fell from 2.9% to 2.1%.

c. In early 2018, real output in the economy rose, while unemployment declined.

FALSE, real output fell from 2.9% to 2.1% as well as unemployment that fell to 3.9%.

d. The prices of all domestic products and services rose in 2017.

TRUE, the consumer price index increased by 2.1% during 2017.