Author Question: Reflecting the state of the economy in 2008, the Bureau of Labor Statistics reported in October that ... (Read 129 times)

saliriagwu · **on:** Jun 29, 2018

Reflecting the state of the economy in 2008, the Bureau of Labor Statistics reported in October that over 1000 jobs were lost in the legal services sector. For example, one firm in Chicago stated that it had fired 54 lawyers in 2008.

A representative from the firm stated that most had worked in its real estate division. www.nytimes.com, 11/11/2008 The lawyers that were fired are an example of ________ unemployment. A) frictional
B) structural
C) efficiency wage
D) cyclical

Question 2

On January 1, 2015, United Delivery had trucks valued at 1.3 million. During 2015, United Delivery purchased new trucks valued at 500,000. If the value of the trucks on December 31, 2015 was 1.

5 million, what is the amount of its net investment and its depreciation during 2015?

bobsmith · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

D

Answer to Question 2

Net investment is the change in the capital stock from one period to the next. For United Delivery, net investment equals 1.5 million - 1.3 million = 200,000. Net investment also equals gross investment minus depreciation, so depreciation equals gross investment minus net investment. Gross investment, the total amount spent on new capital equipment, was 500,000. Net investment was calculated to be 200,000. Therefore depreciation equals 500,000 - 200,000 = 300,000.