SCENARIO INTRODUCTION Use the information provided below to...

SCENARIO INTRODUCTION Use the information provided below to complete the questions. Suppose that data in tables 1 & 2 correspond to the small nation of Collegeville. (Table 1) National Income Accounting latest year data (Table 2) Demographics & Market Basket Data Consumption of Durable Goods $900,000 Population 2,900 Consumption of Nondurable Goods $850,000 16 or younger 581 Compensation of Employees $765,000 Institutionalized 350 Consumption of Services $1,230,000 Without a job but not actively looking 490 Fixed Residential Investment $250,000 Do not have a job, but are actively seeking work 193 Corporate Profits $130,000 Work Part-Time 351 Fixed Nonresidential Investment $550,000 Work Full-Time 935 Consumption of Fixed Capital $70,600 Cost of Basket 2018 $2,540.00 Change in Inventories $125,000 Cost of Basket 2019 $2,845.00 Government Purchases of Goods and Services $750,000 Cost of Basket 2020 $3,272.00 Exports $250,000 Natural Rate of Unemployment 8% Imports $60,000

Thanks for your feedback!

CALCULATING GDP 1. According to the information provided in the GDP background information handout, a) what are the 4 categories of the expenditures approach? b) how are these categories used to calculate GDP? 2. According to table 2 in the GDP background information handout, what are the subcategories of Personal Consumption Expenditures? 3. According to table 2 in the GDP background information handout handout, what are the subcategories of Gross Private Domestic Investment? 4. Use the data provided in Table 1 and 2 (above), to calculate (show your work) the following macro aggregates: a) Personal Consumption Expenditures, b) Gross Private Domestic Investment, c) Net Exports, d) Government Purchases of Goods and Services, e) GDP using the expenditure approach & f) GDP per Capita. CALCULATING INFLATION & UNEMPLOYMENT 5. Collegeville economists have been using 2018 as their base year to calculate inflation. a) What is the CPI during the base year (2018)? b) What is the CPI for 2019? c) What is the CPI for 2020? 6. Calculate the rate of inflation for Collegeville between the base year (2018) and 2019? In other words, what was the rate by which prices increased between those years? Round the percentage to one decimal place; that is, 4.36% is 4.4%. 7. Calculate the rate of inflation for Collegeville between 2019 and 2020? In other words, what was the rate by which prices increased between those years? Round the percentage to one decimal place; that is, 4.36% is 4.4%. 8. How many discouraged workers does Collegeville currently have? Is this group considered to be in the Labor Force? Why or why not? 9. Calculate the unemployment rate for Collegeville. Round the percentage to one decimal place; that is, 4.36% is 4.4%. 10. Once you have calculated the current unemployment rate in Collegeville, what is the corresponding ‐employment rate‐. In other words, which proportion of the labor force is considered employed? 11. Explain the relationship or connection between the Natural Rate of unemployment and the concept of Full Employment? 12. According to the data, is the economy of Collegeville performing at, above or below full employment? Explain.

Play audio

Feedback

Question

Please give Ace some feedback