Compare your standard of living with that of your parents when they were the age you are now.

Essay: Answer the following in complete sentences. (couple sentences – 1 paragraph)

1. Compare your standard of living with that of your parents when they were the age you are now. Ask them or somebody you know around their age to recall where they were living and what they owned. How has the well-being of the typical person changed over the last 25 years? Explain your answer.
2. A friend who knows of your interest in economics comes up to you after reading the latest GDP data and excitedly exclaims, “Did you see that nominal GDP rose from $19 trillion to $19.5 trillion?” What should you tell your friend about this news?
3. In January 2015, the U.S. economy added 257,000 new jobs. Yet the unemployment rate rose from 5.6% to 5.7%. How is this possible?
4. Leisure time is not included in GDP, but what would happen if it was included? Would high-work countries like South Korea fare better in international comparisons of well-being, or worse?
5. Suppose the Fed buy $1 million in Treasury securities from commercial banks. What affects will this action have on the bank’s reserves and the money supply? Use a required reserve ratio of 10%, and assume that banks hold no excess reserves and that all currency is deposited into the banking system.
6. Determine if the following changes affect M1 and/or M2
7. An increase in savings deposits
8. A decrease in credit card balances
9. A decrease in the amount of currency in circulation

1. A conversion of a savings account to a checking account.