Download Running head: ECONOMY ECONOMY Economy Student`s Name

Running head: ECONOMY
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Economy
Student’s Name
Institution
ECONOMY
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Task 1
One of the measures of economic growth is the level of unemployment (Hall &
Lieberman, 2012). Unemployment is the state where people are consistently looking and are
unable to find a job (Hall & Lieberman, 2012). A high level of unemployment suggests that the
country is not undergoing any economic growth, or the economic growth is slow while a low
level of unemployment signifies that the country or region is enjoying a high level of economic
growth (Hall & Lieberman, 2012). This first part of this research paper will focus on the rate of
unemployment in the state of Texas. It will aim at analyzing the changes that have taken place in
the labor market and the rate of unemployment and how this rate compares to other states and the
United States at large.
The level of unemployment in the state of Texas has declined though at a small
percentage. According to the U.S Bureau of Labor Statistics, the number of job gains between
December 2014 and March 2015 totaled 558,120 while the number of job losses in the same
period were 554,065 (Bls.gov, 2015). This amounted to a net job gain of 4,055 (Bls.gov, 2015).
This figure is lower compared to the 139,098 net job gains that were recorded in a similar period
of the previous year, 2014 (Bls.gov, 2015). The Business Employment Dynamics which tracks
the employment statistics in the state, stated that the decrease in employment was as a result of
the decline in the prices of oil (Bls.gov, 2015). The oil industry, which is the leading employer in
Texas, suffered a price crisis where the price of one barrel of oil reduced from $100 to $50. In an
effort to salvage their profits, most oil companies had to lay off their employees to reduce
operating costs (Bls.gov, 2015).
In spite of the decline in net job gains, Texas stills boasts of the lowest unemployment
rates in the nation at 4.2%. This rate is lower than the national unemployment level of 5.5%. The
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unemployment level is still lower because other industries have risen up to compensate for the
weakening energy sector. Economic sectors such as mining, transport, manufacturing, real estate
and the tech sector have continued to drive the Texan economy thus its low level of
unemployment (Bhattacharya, 2015). According to the United States’ Department of Commerce,
the Texan economy registered the second highest growth at 5.2% in 2014. This rate of growth
was only second to North Dakota and is responsible for the increased rate of labor force
participation. More and more people are relocating from other states to Texas to take advantage
of the growing economy and stable labor market (Bhattacharya, 2015).
Task 2
Gross Domestic Product (GDP) is the total value of goods and services produced in a
nation during a given period of time, usually one year (Brezina, 2012). Basically, it is the sum
total of all purchases, both goods and services, made in a country in one year (Brezina, 2012).
Just like a low level of unemployment is an indicator of economic growth, a high level of Gross
Domestic Product shows that the economy of a nation is growing.
When a woman who generates income by providing advice to her clients over the
Internet, later marries one of the client who she now provides free advice to, the level of Gross
Domestic Product and economic growth reduces. For example, if the client used to pay $1000 for
the services offered, the Gross Domestic Product after the marriage between the woman and the
client would be less by $1000 since the client will not be paying for the advice. Consequently, a
reduced level of Gross Domestic Product leads to a reduced level of economic growth (Brezina,
2012).
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When the unpaid amateur does not receive his share of the price money, the level of
Gross Domestic Product will remain the same. This is because the share of the prize money
earned by the amateur can be considered transfer payment to the tournament sponsor. Though
the prize money has monetary value, it cannot be included in the calculation of the Gross
Domestic Product because it is a transfer payment and transfer payments are not included in the
calculation of the Gross Domestic Product (Brezina, 2012).
The installation of a new antipollution equipment in the smokestacks of a public utility
has two effects on the Gross Domestic Product. Firstly, the purchase and installation of the
antipollution equipment will increase the level of Gross Domestic Product. The manufacturers
who made the equipment and those who installed it will all receive payment. Secondly, the
installation of the antipollution equipment will reduce the negative externalities that were as a
result of the air pollution. With decreased or no air pollution the level of Gross Domestic Product
will decrease. The expenses that people incurred to buy medicine following medical
complications brought about by air pollution will not be incurred. The pharmaceutical sector of
the region or country will experience a reduction in its sales.
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References
Bhattacharya, A. (2015). Is Texas America's best state economy? CNNMoney. Retrieved from
http://money.cnn.com/2015/06/10/news/economy/texas-big-economic-growth-2014/
Bls.gov,. (2015). Business Employment Dynamics in Texas – First Quarter 2015 : Southwest
Information Office : U.S. Bureau of Labor Statistics. Retrieved 20 January 2016, from
http://www.bls.gov/regions/southwest/news-release/businessemploymentdynamics_texas.htm
Brezina, C. (2012). Understanding the Gross Domestic Product and the Gross National Product.
New York, NY: Rosen Pub.
Hall, R., & Lieberman, M. (2012). Macroeconomics. Mason, OH: South-Western, Cengage
Learning.