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Running head: ECONOMY 1 Economy Student’s Name Institution ECONOMY 2 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 ECONOMY 3 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). ECONOMY 4 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. ECONOMY 5 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.