I dont understand microeconomics

Clearly answer the following questions. Type your answers. Use Diagrams where necessary (using Word graphing tools). Be sure the graphs are clearly labeled. Do not attach or insert photos into your Word document.

Table: iPhones

1. (Table: iPhones) This table shows data for a country producing only iPhones. What is nominal GDP in 2010? What is the growth rate of real GDP between 2000 and 2010 (in 2000 dollars)?

2. What is the formula for calculating GDP using the national spending approach? GDP=C+I+G+(Ex-lm)

3. What are “incentives” and why are they important in the growth process?

4. Use a figure of the loanable funds market to briefly explain what will happen to the equilibrium interest rate and the equilibrium quantity of savings and borrowing if an improvement in healthcare services increases people’s life expectancy.

5. Explain how an increase in government borrowing reduces private consumption spending and investment spending. What is this effect called?

6. If Congress passes legislation making it more difficult for firms to fire workers, how will this legislation affect the nation’s level of unemployment? (An example might be a law requiring severance pay for fired workers.) Explain.

7. What would you expect to happen to the unemployment rate during a recession? How about the natural rate of unemployment?

8. Suppose that you are buying your first home. Current interest rates on a 30-year fixed- rate mortgage are 5%. Lenders expect an inflation rate of 2% over the next 30 years, thus giving them an expected real return of 3%. If actual inflation over the next 30 years is 4% because of a continued rapid expansion of the money supply, would you be better off or worse off by taking out a 30-year fixed-rate mortgage?

9. Table: CPI Schedule

Use the end-of-year CPI values shown in the table to answer the following questions.

A) Calculate the inflation rate for the cells marked A–D in the table.

B) In which year did this economy experience deflation?

C) In which year did this economy experience the lowest level of inflation?

10. Use the quantity theory of money to explain how an increase in the money supply leads to an increase in the price level.

11. Explain why periods of high inflation but low growth in output are so difficult for policy makers to deal with.

12. Using the AD-AS model, show and explain how real GDP growth and inflation would change in both the short run and long run if the growth rate of the money supply increases unexpectedly.

13.Briefly explain this statement: “In the long run, money is neutral.” Does this statement mean the money supply has no effect at all on real economic activity? Explain.

14. How does the nature of irreversible investments affect the impact of a negative shock on the economy?

15. Define collateral damage and explain why collateral damage reduces bank lending.