Labor, GDP, and the Firm
The most important resource for all firms is labor. In this SLP, we will look at the labor decisions of the firm. Please address the following questions in a 3-4 page essay.
1. Labor is an important factor of production for all firms. The most recent unemployment rate is estimated at 9% (January 2011). Economists have identified three types of unemployment. Which type would affect your firm. Explain. Be sure to review section 3 of Chapter 20 in the background readings.
2. Think about other employment issues such as outsourcing. Do you think your firm would benefit from outsourcing? If you chose a firm in which outsourcing is not feasible, you can still discuss the advantages (or disadvantages) of outsourcing.
3. If a U.S. firm hires foreign workers abroad, would these wages count in the U.S. GDP? (i.e. a Chinese citizen working in a Nike factory in China) Why or why not?
4. Based on the economic indicators studied in this module, what are your forecasts for your firm in terms of profit, employment, and production
