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    Economic Variables: Average Income

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    This is the first component that discusses the decision-making process of monetary policy and analyzes how a particular recommended policy will affect the U.S. economy.

    In this Part 1, you will collect data and information about the current economy and submit a short background report in a document in three to five pages.

    Using legitimate business publications and governmental Web sites, research the answers to the following questions:
    1. What is the current average national income?
    2. What is the current unemployment rate?
    3. What is the current inflation rate?
    4. What factors affect each of these economic variables?

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    Solution Preview

    The Bureau of Labor Statistics is part of the U.S. Department of Labor that is responsible for calculating and tracking statistics such as the National Average Income, Unemployment rate and measuring the rate of inflation.

    1: Based on the Bureau of Labor Statistics website, located at http://www.bls.gov/oes/current/oes_nat.htm the average national income (wage) for an individual worker is: $45,790

    2: Based on a news release from the Bureau of Labor Statistics in October of 2013 (found here: http://www.bls.gov/news.release/pdf/empsit.pdf) , the current national unemployment rate is 7.3%

    3: The current inflation rate is measured by the CPI, or Consumer Price Index. This index is tracked by the Bureau of Labor Statistics and for the past rolling 12 months through Sept 30th 2013 the CPI, or inflation rate is measured to be 1.2%. The latest data can be found here: http://www.bls.gov/news.release/cpi.nr0.htm

    4: Average income, Unemployment rate, and the CPI/inflation rate are considered to be good measurements of the state of the economy. There are many factors that can affect each of these variables.

    Average national income- This is the mean (not median) pay for a worker in the United States. Wages are a price that company pay for labor. Prices are determined mostly by market forces or sometimes regulations. The minimum wage for example is set by government regulations. ...

    Solution Summary

    A summary of how average income, unemployment rate, and inflation rate impact the economy.