For decades, debates went on about what caused the economic catastrophe, and economists remain split over a number of different schools of thought. Suppose one company manufactures tires that last 15,000 miles and another company uses 10% more labor and materials to produce tires that last 30,000 miles. *long term: -Leia examines real per capita GDP over a ten-year period to determine whether the economy of a particular country is in decline or on the rise.

3-Video game consoles offer better graphics and gameplay than they did a decade ago. Such practices are seen as being unsustainable and, thus, many believe that they should be counted against a country’s GDP. 1-Actual GDP is above potential GDP. Match each scenario to the label that best represents the person’s employment situation.

Executives should seek the measure that promises the greatest impact, not the measure boasting the greatest accuracy or technical elegance. But suppose one business ships orders within three days of receiving them and the other takes three weeks.

Excludes non market transactions. The three most common alternatives are standard costs, price, and technical parameters (like miles of tire life) that quantify product performance. And finally, technological knowledge refers to society’s understanding of the best ways to produce goods and services. A manager will look at a productivity index developed by a specialist and say, “Whoever came up with this has no idea what my business is like.”. What data do economists use to calculate the real GDP of a nation? Many people switch to oranges because they are cheaper. ***correct: -The quantity of goods and services in the economy increases by 2% while the supply of money increases by 4%. **correct: -Gwyn may need to spend money to update her price displays throughout the store. Microeconomic impact: key points 93 5. ***incorrect: -higher demand -lower prices. In theory, a company’s make vs. buy decision process should prevent such unintended results. 122 million are employed full-time. The U.S. unemployment rate of (1) adult workers is consistently higher than that of (2) adult workers, and the labor force participation rate is consistently higher for (3) adult workers than for (4) adult workers. Although natural resources are not strictly necessary for an economy to be highly productive, they can be precious (e.g., oil) and bring great wealth and power to those who own them. Why was an organization that was generating handsome profits and cash flows showing such disappointing productivity?

-GDP is going to decrease in the near future. What is the unemployment rate? One U.S. plant manager discovered that nearly 40% of his company’s productivity-improvement budget was allocated to upgrading direct labor efficiency—even though direct labor accounted for only 10% of manufacturing costs. Which of the following scenarios make it difficult to accurately measure the CPI? One big manufacturer, after introducing a multifactor productivity index, discovered that its plants had suffered a significant productivity decline in the early 1980s. The same principle applies to data collection. Technology plays an important part in raising productivity. For instance, if Country A is home to a major multinational’s headquarters (i.e., reports earnings in this country), and that company oversees operations that generate profits of $100 million in Country B, then Country A’s NFIA would be $100 million. Comparing the performance of plants making different products requires a method to determine equivalencies.

Bad management, right?

6-A family of three purchases a newly built home. W. Bruce Chew is a senior consultant at Monitor Company, a global consulting firm in Cambridge, Massachusetts. Calculate the annual percentage change in price level for the year 2014.

underground economies are smallest in countries with small economies, Lupe examines the real per capita GDP of seven small nations to determine which country might have the wealthiest citizens, Brad looks at real per capita GDP to determine what impact the recent recession has made on economic activity, Leia examines real per capita GDP over a 10 year period to determine whether the economy of a particular country is in decline or in rise, % change in nominal GDP - % change in price level - % change in population, which by definition directly adds to a country's GDP. While staff was shrinking in the rest of the bank, data processing came under incredible pressure.

The equation to calculate GNI is: FIAin – Factor Income from Abroad “In” (i.e., receivables from abroad business), FIAout – Factor Income from Abroad “Out” (i.e., payables to abroad business), (FIAin – FIA out) – Net Factor Income from Abroad (NFIA). The definition of normative decision making with examples. Marshall has recently lost his job and is currently receiving federal jobless benefits. All the samples offered are a source of inspiration, writing ideas and creativity boost. On the other hand, the benefits may also cause Marshall to become (3) incentivized to take a job and (4) the amount of time he spends unemployed. Many companies that want to raise their competitiveness are investing a lot of money and faith in methods to track their plants’ and offices’ efficiency. It applies (3). Understanding the shortfalls of GDP and exploring alternative metrics. 1-Unstable inflation makes it difficult for lenders to anticipate the value of their money in the future.

Workers who are very productive can be paid thousands of dollars more than employees elsewhere and the business can still prosper, as manufacturers like Lincoln Electric have demonstrated. 2-A new smartphone app solves math problems simply by pointing the camera at the page. Yes. GNI is a similar measure to GDP, except that it focuses on net national income. The value of the goods and services produced in the United States is the gross domestic product.

It is commonly known that the best pizza must be baked in a wood-fired, domed oven. Thus, he needs a lot of firewood. For example, John didn’t start as an experienced pizza baker. 6-The cost of cable increases. Which of the following scenarios could lead to inflation? The scale of underground economies varies greatly between nations and, in some cases, they make up a substantial percentage of a country’s economic output. The velocity of money is the frequency with which money (1). But unless a productivity index assigns some value to the amount of time consumed, it is unrealistic to expect managers to focus on shortening turnaround times. A set of practical guidelines can help them understand, evaluate, and apply productivity measurement techniques effectively. His operation’s primary role was to process prototypes of new products, but he discovered that several company divisions were routinely sourcing prototype work to outside suppliers because of his plant’s unacceptably long lead times. Visit our, Copyright 2002-2020 Simplicable. 4.2.3. Much to management’s dismay, however, when the results were in, the model suggested that not one unit was performing up to snuff. Single-minded attention to direct labor can produce unexpected consequences. Your boss offers you a $10,000 raise and the opportunity to move to another city and work remotely. For each output, apply the appropriate label. it is the economic output when unemployment is at 0. that a country earned over a certain time period from other countries. Finally, he worked as a commis at an Italian restaurant for some time to gain work experience. But specialists are often trained to focus on the technical elegance and statistical accuracy of productivity indexes. correct: -It is possible for the underground economy to have an effect on the legitimate economy. ***Structural -unemployment: offering job training and educational programs -providing subsidies to encourage people to relocate ***frictional -unemployment: decreasing the amount of paperwork employers must complete for newly hired workers -increasing the amount of severance pay employers must pay when they fire someone. If you adjust for the price change by comparing revenues using 1987 prices, output went down. It’s not about wages—in fact, it’s not about any specific set of costs. The results also indicate that while agricultural productivity has a positive impact on welfare growth for non-poor households, it has a negative impact for poor households. How to calculate efficiency with examples. Which two nations lie in the upper right corner, with explosive growth in the money supply and, correspondingly, runaway inflation? Perhaps the most important use of productivity measurement is as an objective source of information about long-term operating trends. How good is your company at taking a pile of raw materials, a bunch of machines, stacks of paperwork, and groups of employees, and turning out useful goods or services? Expenditures on health by government 90 4.3.2. This would be an example of price (3). If you focus on physical units, output stayed the same. ***correct: -brazil -angola ***incorrect: -nicaragua -guinea. Engineers, supervisors, and other white-collar employees make significant contributions to manufacturing productivity, but few systems measure their roles. -The government prints $500 million in new currency to pay off foreign debts. 1-non-market good 2-non-market good 3-underground economy 4-underground economy. 5-Olivia can’t find a job in her college major, so she’s no longer looking for work. 1-Jennifer buys toothpaste. Since neither lends itself well to direct measurement, productivity technicians often prefer to look the other way. Which of the following groups would be not be counted as unemployed when calculating the unemployment rate? T/F. (The Northern Telecom system cited earlier is a notable exception.).



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