Assignment:
Part 1: Expenditures Approach to Calculating GDP
Complete the following exercise:
Visit the Bureau of Economic Analysis website at www.bea.gov. From the drop-down menu under "Data", click on "by Economics Account". Then click on "National", "Gross Domestic Product, and "Full Release and Tables". Use tables 3A (Gross Domestic Product and Related Measures) and 3B (Real Gross Domestic Product and Related Measures).
a) Create the table that contains the following information for the last quarter.You need this information from bothtables. Omit the intermediate lines found in Tables 3A and 3B on the web site.
Gross domestic product
Personal consumption expenditures
Gross private domestic investment
Net exports of goods and services
Government consumption expenditures and gross investment
1. b) Calculate the percentage (the proportion) of each category in nominal GDP and in real GDP.
Using Nominal GDP:
[Personal consumption expenditures / Nominal GDP]*100%
[Gross private domestic investment / Nominal GDP]*100%
[Net exports of goods and services / Nominal GDP]*100%
[Government consumption expenditures and gross investment/ Nominal GDP]*100%
And using Real GDP:
[Personal consumption expenditures / Real GDP]*100%
[Gross private domestic investment / Real]*100%
[Net exports of goods and services / Real GDP]*100%
[Government consumption expenditures and gross investment/ Real GDP]*100%
Present the information that you received in 1 (a) and 1 (b) as a table(s) in your project.
2. Write a report (2 pages double - spaced), which contains an analysis of the results you received.
In this report consider, but do not be limited to the following:
1. Why was the nominal GDP greater than the real GDP? By how much?
2. GDP is composed of a number of categories. What category makes up the largest portion of GDP? What category makes up the smallest portion of GDP?
3. What is "Gross private domestic investment"? What does gross private domestic investment measure?
4. What is "Net exports of goods and services"? Why it is negative?
5. In the table 3A find the category "National defense". How much was the National defense for the last quarter? Calculate percentage of National defense out of "Government consumption expenditures and gross investment". Calculate percentage of National defense out of GDP.
6. Please analyze and discuss the significance of the data that you received for this Data exercise. Reflect on what you have learned from this exercise.
Part 2: Income Approach to Calculating GDP
Complete the following exercise:
Visit the Bureau of Economic Analysis website at www.bea.gov. From the drop-down menu under "Data", click on "by Economics Account".
Then click on "National", "Gross Domestic Product, and "Full Release and Tables". Use table (Relation of Gross Domestic Product, Gross National Product, and National Income).
1. Create the table that contains the following information for the last year quarterly. Omit the intermediate lines found in Table on the web site.
Gross domestic product
Gross national product
Net national product
National income
Personal income
2. Write a report in your own words (1 page, double-spaced), which contains the analysis of the results you received. In this report consider, but do not be limited to the following:
1. What is the difference between gross domestic product (GDP) and gross national product (GNP)? What is the difference in what GDP measures compared to GNP?
2. Based on the table, what calculations must you make to determine GNP from GDP?
3. What is national income (NI)? What does NI measure?
4. Which was higher in this year, GNP or NI? By how much?
5. What calculations must you make to determine NI from GNP?
6. NI is composed of a number of categories. What category makes up the largest portion of NI?
7. Please analyze and discuss the significance of the data that you received for this Data exercise. Reflect on what you have learned from this exercise.
Part 3: GDP in Different Countries
Complete the following exercise:
Go to World Development Indicators database:
Select 8 countries for your project by checking the check boxes under Country.
Select the 2 data series GDP (current US$) and Population (Total) under Series.
Select the most recent year under Time.
You can now retrieve that data by clicking one of the options on the upper right of the window. Clicking "Table" will allow you to view and copy the data for each country. Clicking "Download" will allow you to download the data in Excel, which can then be copied into your report table.
Or you can simply type the required data into the table below.
Fill in the table below. Present the table in your project. Calculate the per capita GDP for the most recent available year for the countries with the equation given in the far right column.
|
Country
|
GDP
|
Population
|
Per Capita GDP
|
|
1
|
2
|
3
|
4 = 2/3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write a short report in your own words (1 page, double-spaced), which contains the analysis of the results you have gotten. In this report consider, but do not be limited to the following:
1. List the countries by highest per capita GDP to lowest.
2. Does the order remain the same for total GDP as for per capita GDP.
3. If not, explain why is it different?
4. Please analyze and discuss the significance of this data and reflect on what you have learned from this exercise.
Part 4: Index of Economic Freedom
Log onto the Heritage Foundation's website at https://www.heritage.org/index/
"Today, we live in the most prosperous time in human history. Poverty, sicknesses, and ignorance are receding throughout the world, due in large part to the advance of economic freedom. In 2018, the principles of economic freedom that have fueled this monumental progress are once again measured in the Index of Economic Freedom, an annual guide published by The Heritage Foundation, Washington's No. 1 think tank.
For over twenty years the Index has delivered thoughtful analysis in a clear, friendly, and straight-forward format. With new resources for users and a website tailored for research and education, the Index of Economic Freedom is poised to help readers track over two decades of the advancement in economic freedom, prosperity, and opportunity and promote these ideas in their homes, schools, and communities.
The Index covers 12 freedoms - from property rights to financial freedom - in 186 countries."
Click on COUNTRY RANKING to find the rank of economic freedom. IMPORTANT - Make sure you use the Rank and not the Overall Score.
Click on EXPLORE THE DATA to find the rank of business, trade, financial freedom, and property rights.
1. Find the rank in economic freedom (overall) of the countries that you were using in part III of the assignment.
2. Find the rank in business, trade, financial freedom, and property rights of the countries that you were using in part III of the assignment.
3. Compare the rank in economic freedom (overall) and other indicators with the order of the countries using the per capita GDP in the table in part III of the assignment.
4. Present the information that you received in your project as a table.
5. Write a report in your own words(1 page, double-spaced), which contains the analysis of the results that you received. Discuss the significance of the data and what you feel is the relevance of rankings. Please reflect on what you have learned from this assignment.