1. Assume that a grower of flower bulbs sells its annual output of bulbs to an Internet retailer for $70,000. The retailer, in turn, brings in $160,000 from selling the bulbs directly to final customers. What amount of would these two transactions add to personal consumption expenditure and thus to GDP during the year?
2. If in some country personal consumption expenditures in a specific year are $50 billion, purchases of stocks and bonds are $30 billion, net exports are -10 billion, government purchases are $20 billion, sales of secondhand items are $8 billion, and gross investment is $25 billion, what is the country's GDP for the year?
3. Using the following national income accounting data, compute (a) GDP, (b) NOP and (c) NI. All figures are in billions.
Compensation of employees $194.2
U.S. exports of goods and services 17.8
Consumption of fixed capital 11.8
Government purchases 59.4
Taxes on production and imports 14.4
Net private domestic investment 52.1
Transfer payment 13.9
U.S. imports of goods and services 16.5
Personal taxes 40.5
Net foreign factor income 2.2
Personal consumption expenditures 219_1
Statistical discrepancy 0
4. The following table shows nominal GDP and an appropriate price index for a group of selected years. Compute real GDP. indicate in each calculation whether you are inflating or deflating the nominal GDP data.
YEAR NOMINAL GDP, PRICE INDEX REAL GDP,
BILLIONS (2005=100) BILLIONS
1968 $909.8 22.01
1978 2,293.8 40.40
1988 5,100.4 66.98
1998 8,793.5 85.51
2008 14,441.4 108.48
5. Assume the following date for a country: total population, 500; population under 16 year of age or institutionalized, 120; not in labor force, 150; unemployed, 23; part-time workers looking for fulltime jobs, 10. What is the size of the labor force? What is the official unemployment rate?
6. Suppose that the nominal rate of inflation is 4 percent and the inflation premium is 2 persent. What is the real interest rate? Alternatively assume that the real interest rate is 1 percent and the nominal interest rate is 6 percent. What is the inflation premium? of three goods for the years 2005, 2006, and 2007.
7. The economy of Britannica produces three goods: computers, DVDs, and pizza. The table below show the prices and output of the years 2005, 2006 and 2007.
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|
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DVDs
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Pizza
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| Computers |
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Year
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Quantity
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Price
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Quantity
|
|
|
Price
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Quantity
|
Price
|
|
|
|
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2005
|
$900
|
10
|
$10
|
100
|
$15
|
2
|
|
|
|
|
|
|
|
2006
|
11000
|
10.5
|
12
|
105
|
16
|
2
|
|
|
2007
|
|
|
14
|
110
|
17
|
3
|
|
|
1,050
|
12
|
|
|
|
|
a. What is the percent change in production of each of the goods from 2005 to 2006 and from 2006 to 2007?
b. What is the percent change in prices from each of the goods from 2005 to 2006 and from 2006 to 2007?
c. Calculate nominal GDP in Britannica for each of the three years. What is the percent change in nominal GDP from 2005 to 2006 and from 2006 to 2007?
d. Calculate real GD in Britannica using 2005 prices for each of the three years. What is the percent change in real GDP from 2005 to 2006 and from 2006 to 2007?