1.Forthis task on the economic way of thinking and economic indicators I have chosendata from the Kingdom of Bahrain on employment, wages, real GDP and inflation. I am going to ask you a series of...

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1.




For
this task on the economic way of thinking and economic indicators I have chosen
data from the Kingdom of Bahrain on employment, wages, real GDP and inflation. I am going to ask you a series of questions
that you will answer using these data and some of the essentials of the
economic way of thinking.




















































































































































Indicator








2020Q1








2020Q4








2021Q1








Total Employment








743,620








687,700








685,204








Bahraini Employment








156,746








152,678








153757








Non-Bahraini Employment








586,874








535,022








531,447








Monthly Wage, Public Sector








BD702








BD705








BD714








Monthly Wage, Private Sector








BD441








BD447








BD455








Real GDP in billions of BDs








BD3.151








BD3.086








BD3.064










The inflation rate in Bahrain between
2020Q1 and 2021Q1



(year-over-year) was -2.7%; obviously prices in general fell.







Here
are the questions I want you to answer.







a)




When
we look at economic data we do so to elicit signals. First, I want you to define what we in this
course call a “direct signal” and what we call and “indirect signal”. Once done take a look at the level of total
employment and tell me, for that row, how many direct signals are there? List them and briefly explain why they are
direct signals.







b)




Let’s
consider using these same employment figures to draw inferences about real GDP,

i.e., an indirect signal. Assume that you have only these total
employment figures. Might you be able to draw an inference about what happened
to RGDP over the same period based on these labor numbers, (i.e., what is the story that would allow
you to infer?)? Why or why not? If so,
what would be your guess as to the direction of change in RGDP over the
period? Do the data on RGDP concur with
your inference?







c)




Now
take a look at employment during the pandemic on a year-over-year basis. Which sector took the biggest hit in absolute
and percentage terms over this period?
Provide the figures. Does this outcome
surprise you or is it what one would expect, given the nature of the Bahraini
workforce? Explain.







d)




Note
the difference between the wages in the public
(i.e., government) and private sectors and the nationality of those
who dominate those sectors. Does this wage gap surprise you? Whether it does or does not, what economic and/or
social factors might explain this 60% difference in wage levels?







e)




Now
let’s consider the issue of real versus nominal. Take a look at the wages of the two
sectors. Did they rise or fall in
nominal terms year-over-year (2020Q1 to 2021Q1) and if so by how much, by
sector? However, what really matters in
economics are real values. What were the
changes in real wages earned by the two sectors? Explain how you came to this conclusion.







f)




In
part c you will note that the public wage is much greater than the private but
the percent changes in wages in real terms were not identical. Speculate on why
the wages of the private sector rose more than public in this particular
period.








Answered 2 days AfterOct 13, 2022

Answer To: 1.Forthis task on the economic way of thinking and economic indicators I have chosendata from the...

Rochak answered on Oct 15 2022
51 Votes
Answer 1:
a. ‘Direct Signal’ are the signals which measure the movements in the indicator that is being measured, this can be done using various methods like finding the percentage change i
n the value of the indicator between two periods. Direct signals are the ones which give us indications about the macro indicator (Farber 2002).
‘Indirect Signals’ are signals which are based on certain parameters like the correlation between two indicators, which means how are the two indicators related for example stock market indices and interest rates in the economy are indirectly related. Indirect signals talk about the variable by comparing it with others (Farber 2002).
There are a total of six direct signals present in the ‘Total Employment row which are:
1. Total Employment – 2020 Q1
2. Total Employment – 2020 Q4
3. Total Employment – 2021 Q1
4. Change in Total Employment from 2020 Q1 to 2020 Q4
5. Change in Total Employment from 2020 Q4 to 2021 Q1
6. Change in Total Employment from 2020 Q1 to 2021 Q1
These are direct signals because total employment tells what exactly the employment level in the country is, and the change in the total employment talks about how employment is changing over a period
b. Yes from the same ‘Total Employment’ we can draw inferences about GDP and this can be inferred because total employment is directly related to the GDP of a country, which means that when the total employment in the country rises the GDP of that country increases and vice-versa.
Here the total employment level was as follows:
1. Total Employment – 2020 Q1 = 743,620
2. Total Employment – 2020 Q4 = 687,700
3. Total Employment – 2021 Q1 = 685,204
Therefore, it can be seen that the total employment has been decreasing over the period and each quarter it has been reducing which means that the GDP of the country is decreasing.
My guess is the same the GDP level for the...
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