g.Measured real GDP falls because fathers spend ls time producing market goods and services.The actual production of goods and services need not hav fallen however.Measured production(what the fathers are paid to do)falls,but unmeasured production of child-rearing services rises. 2.Explain the difference between government purchases and transfer payments. Give two examples of each 2.Government purchases are those goods and services purchased directly by the government.For example,the government buys missiles and tanks,builds roads,and provides 11 services such as air traffic control.All of these activities payments to individuals exchange for goods or services. They are the opposite of taxes:taxes reduce household disposable income,whereas transfer payments increase it.Examples of transfer payments include Social Security payments to the elderly,unemployment insurance,and veterans'benefits. 3.What are the three functior s of money?Which of the functions do the following items satisfy?Which do they not satisfy? a.A credit card b.A painting by Rembrandt c.A subway token 3.Money functions as a store of value,a medium of exchange,and a unit of account. a.A credit card can serve as a medium of exchange because it is accepted in exchange for goods and services.A credit card is.arguablv.a(negative)store of can acc umulate debt with itA c edit card is not a unit of wRaeeoM st 5 VISA cards c.A subway token,within the subway system,satisfies all three functions of money. Yet outside the subway system,it is not widely used as a unit of account or a medium of exchange,so it is not a form of money 4.Describe the difference between frictional unemployment and structual unemployment. 4.Frictional unemployment is the unemployment caused by the time it takes to match worker nd iobs.e inding appr e job takes tim use the flow about job can d job vacancies is not instantaneous Because different jobs require different skills and pay different wages, unemployed workers may not accept the first job offer they receive.In contrast, wait unemployment is the unemployment resulting from wage rigidity and job rationing.These workers are unemployed not because they are actively searchingg.Measured real GDP falls because fathers spend less time producing market goods and services.The actual production of goods and services need not have fallen however.Measured production(what the fathers are paid to do)falls,but unmeasured production of child-rearing services rises. 2.Explain the difference between government purchases and transfer payments. Give two examples of each. 2.Government purchases are those goods and services purchased directly by the government. For example, the government buys missiles and tanks,builds roads,and provides 11 services such as air traffic control. All of these activities are part of GDP. Transfer payments are government payments to individuals that are not in exchange for goods or services. They are the opposite of taxes:taxes reduce household disposable income, whereas transfer payments increase it.Examples of transfer payments include Social Security payments to the elderly,unemployment insurance,and veterans’benefits. 3.What are the three functions of money? Which of the functions do the following items satisfy? Which do they not satisfy? a.A credit card b.A painting by Rembrandt c.A subway token 3.Money functions as a store of value,a medium of exchange,and a unit of account. a.A credit card can serve as a medium of exchange because it is accepted in exchange for goods and services.A credit card is,arguably,a(negative)store of value because you can accumulate debt with it.A credit card is not a unit of account—a car,for example,does not cost 5 VISA cards. b.A Rembrandt painting is a store of value only. c.A subway token,within the subway system,satisfies all three functions of money. Yet outside the subway system,it is not widely used as a unit of account or a medium of exchange,so it is not a form of money. 4.Describe the difference between frictional unemployment and structual unemployment. 4. Frictional unemployment is the unemployment caused by the time it takes to match workers and jobs.Finding an appropriate job takes time because the flow of information about job candidates and job vacancies is not instantaneous. Because different jobs require different skills and pay different wages, unemployed workers may not accept the first job offer they receive. In contrast, wait unemployment is the unemployment resulting from wage rigidity and job rationing. These workers are unemployed not because they are actively searching