What other labor market data points should an economist look at to properly gauge the health of the labor market?

question 1
Preface:
Suppose
Maria’s parents want to pay for her undergraduate education at Bard
College, which is a small liberal arts school in Upstate New York.
Suppose that tuition costs $35,000 for the 1st year. Maria’s parents are
willing to pay up to $40,000 for the 1st year of tuition.
Maria’s
parents have $35,000 in an FDIC insured certificate of deposit (CD)
that contractually pays a fixed 2% interest rate over the course of the
next year. Another bank will give Maria’s parents a $35,000 student
loan at a fixed 3% interest rate with no money down. The loan is only
for 1 year, and the interest and principal payment are due at the end of
the year.
Instructions:
Use the information in the preface to answer the following questions in an essay format:
1)
Should Maria’s parents take out a student loan, or should they pay the
tuition with the balance in their bank account? Explain and defend your
reasoning as to why Maria’s parents should either take out a student
loan or pay the tuition with the balance in their bank account. Please
make sure that you utilize concepts from the course to defend your
answer.

2) Is there any risk or variability in the outcomes of their decision? Explain your reasoning.

question 2
The Senate Finance Committee created the Boskin Commission in 1996,
which consisted of five prominent economists, to report on any biases in
the Consumer Price Index (CPI). The Boskin Commission concluded that
the CPI overstated inflation by 1.1 percentage
points, meaning that if the official CPI stated inflation rate was
3.0%, then the true rate of inflation was 1.9% (3.0%-1.1%) in the eyes
of the Boskin Commission.
The following tables detail the average nominal yearly wages of
workers with only a high school degree and the average real wages (2016
dollars) for the years 1980-2016. The first table’s CPI is based on the
Bureau of Labor Statistic’s CPI data and the second table is based on
the Boskin Commission’s CPI.
Instructions:
Use the information in the preface to answer the following questions in an essay format:
1) How would the 1.1 percentage
point reduction in the CPI inflation rate revise or change the level of
wages in the United States? Why were individual’s incomes higher or
lower than what economists previously had thought under the Bureau of
Labor Statistics’ (BLS) prior formulation of the CPI?
2) How would the 1.1 percentage point reduction in the CPI inflation
rate revise or change the rate of real wage growth in the United States
over the previous decades? Why would it revise or change the rate of
real wage growth?
3) Suppose that the Boskin Commission did NOT conclude that the CPI
overstated inflation by 1.1 percentage points. Rather, lets suppose
that the Boskin Commission concluded that the CPI understated inflation
by 2 percentage points, meaning that if the official CPI stated
inflation rate was 3.0%, then the true rate of inflation was 5.0% (3.0% +
2.0%) in the eyes of the Boskin Commission.
How would the 2 percentage point increase in the CPI inflation rate
revise or change the rate of real wage growth in the United States over
the previous decades? Why would it revise or change the rate of real
wage growth?

question 3
Questions:
1) How did the unemployment rate change between May and June of 2019?
2) Why might the change in the unemployment rate between May and June
of 2019 be a misleading gauge of the health of the labor market?

3) What other labor market data points should an economist look at to
properly gauge the health of the labor market? Why are these
alternative labor market data points more useful in June 2019, and why
are they useful in general?

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