Recite the factors that influence price elasticity Solution There are 9 Factors which Affects the Elasticity of Price. They are as follows. Share in Total Expenditure: Habits: Number of Uses: Income Level: Nature of commodity: Availability of substitutes: Level of price: Postponement of Consumption: Time Period:.

1. Recite the US track record on growth, unemployment, and inflation
Solution
Growth rate
During 1960-73, average GDP growth rate in US was 4% During 1973-86, the same figure was
2.4%. The GDP growth rate didn't change much and averaged around 2.6% between 1986-90.
During Iraq war years, the growth rate dipped to 1.1% in 1992. During next decade, the path of
recovery was set as the economy grew by 4% till 2001. The dotcom bubble of 2002, brought the
growth rate to levels of 2%. Till 2007, the economy witnesses a growth rate betwen 1-2%. After
the recession set in, the growth rates dipped to negative levels during late of 2008 and 2010. The
economy kept growing at 2-3% between 2011-2014
Unemployment
1. Starting from years after World War II, the unemployment rate between 1950-1970, the lowest
unemployment rate was 2.90% in 1953 while it peaked to 6.80% in 1958.
2. In 1970 the era of stagflation began. It was a period of rising price and stagnant output. The
lowest unemployment rate was 4.90% in 1973 while it peak to 9.70% in 1982.
3. The period from 1982-1993 tamed the unemployment in economy to 5.30% in 1989. The
maximum it hit was 7.50% in 1992. This was the era of Reagonomics.
4. Between 1993-2001, during which Clinton administration governed the nation, the
unemployment rate showed a downward trend as it fell to 4% in 2000.
5. The post-Clinton era saw the unemployment rate falling from 6% in 2003 to 4.60% in 2007.
However, things got worse after the financial turmoil and in 2011 it average around 9.10%. The
unemployment after financial crisis has touch 10%.
Inflation rate
Early 1930s was the onset of the Great Depression in the US which resulted in a negative price
inflation (i.e. deflation) around 10%. In the aftermath of second world war, the price inflation
touched 20% in 1947. However, there was also a brief period of deflation in early 1950. Then till
1968, it stayed between 3-4%. The oil price shock of 1970s led to inflation rate touching 12%.
After a downward spiral in 1978 which brought it down to 5-6.5%, it rose to 14% in 1980s.
However, it has been tamed ever since and it rarely crossed 5% ever since,