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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.
Akash M.
The economy of Grossmania produces three goods: Widgets, Gizmos, and Thingamajigs. The accompanying table shows the output and prices for years 2006 and 2007. (Hint: GDP, in its most basic form, is P x Q. You take the quantity of output and multiply by the price of output.) Widgets Gizmos Thingamajigs Year Price Quantity Price Quantity Price Quantity 2006 $100 1 $10 8 $5 4 2007 $110 1 $12 10 $4 5 7. Calculate the nominal GDP for: a. 2006 b. 2007 8. Compute the percentage of growth in nominal GDP from 2006 to 2007. 9. Using 2006 as the base year, calculate the real GDP for 2007. 10. What is the GDP deflator for 2007? What was the inflation rate between 2006 and 2007? 11. Compute the real rate of output growth from 2006 to 2007. 12. Which of the following is true of real GDP? I. It is adjusted for changes in prices. II. It is always equal to nominal GDP. III. It increases whenever aggregate output increases. a. I only b. II only c. III only d. I and III e. I, II, and III 13. The best measure for comparing a country's aggregate output over time is a. Nominal GDP. b. Real GDP. c. Nominal GDP per capita. d. Real GDP per capita. e. Average GDP per capita. For questions 14-15 use the information provided in the table below for an economy that produces only apples and oranges. Assume year 1 is the base year. Year 1 Year 2 Quantity of Apples 3,000 4,000 Price of Apples $0.20 $0.30 Quantity of Oranges 2,000 3,000 Price of Oranges $0.40 $0.50 14. What was the value of real GDP in each year? Year 1 Year 2 a. $1,400 $2,700 b. $1,900 $2,700 c. $1,400 $2,000 d. $1,900 $2,000 e. $1,400 $1,900 15. What is the GDP Deflator for Year 2? a. 105 b. 135 c. 136 d. 142 e. 143
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(Table: Three-Good Economy II) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. What is the growth rate of real GDP in 2009 if 2008 prices are used in the calculation of real GDP? A) –3.71% B) –1.97% C) 1.00% D) 2.94% (Table: Three-Good Economy II) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. If 2008 prices are used in the calculation of real GDP, then nominal GDP in 2009 is _____ and real GDP in 2009 is _____. A) $34,310; $33,700 B) $35,350; $34,310 C) $33,700; $35,000 D) $35,000; $33,700 (Table: Three-Good Economy II) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. What is the growth rate of real GDP in 2009 if 2009 prices are used in the calculation of real GDP? A) –3.71% B) –2.94% C) –1.97% D) 1.00% (Table: Three-Good Economy II) Suppose an economy produces only the three final goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. What is the real GDP in 2009 if 2009 prices are used in the calculation of real GDP? A) $33,700 B) $35,000 C) $34,310 D) $35,350 Table: Three-Good Economy II Product Quantity (2008) Price (2008) Quantity (2009) Price (2009) Computers 30 $1,000 28 $995 Pizzas 100 10 150 15 Burgers 200 200 210 20
Amman Z.
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