measure economic system Essay

Problems on Measuring how big is the Economy

Econ 20B

These types of problems are useful for preparing for test. One trouble from here will probably be chosen, at random, to be turned in during your dialogue section. You will possess 20 minutes to work with the problem, with help by others and the TA (if you choose).

1 . What components of GDP (if any) would each one of the following orders affect? Make clear. (a) A family group buys a new refrigerator.

(b) Harry Potter buys a brand new house.

(c) Ford markets a Focus from its inventory.

(d) Los Angeles creates a new connection (after carmageddon).

(e) Professor Branch acquires a case of French wine beverage.

(f) The Federal Government cuts unemployment benefits (a transfer payment) as the consequence of the debt limit compromise.

2 . Consider the next data from the country of Professor Department Land. Season Price of Coffee Amount of Coffee Cost of Ale Quantity of Beer 2008

$2

200 gobelet

$3

400 bottles

2009

$2

four hundred

$3

800

2010

$4

400

$6

800

(a) Compute nominal GDP, real GDP, and the GDP deflator for each season, using 08 as the base year.

(b) Compute the proportion change in nominal GDP, true GDP, plus the GDP deflator in 2009 and 2010 from your preceding year. For each season, identify the variable that does not change. Clarify in terms why your answer is practical.

(c) Would economic well-being rise even more in 2009 or perhaps in 2010? Describe.

1

several. Consider the following data on U. S. GDP:

12 months Nominal GDP (in immeasureable dollars)

2k

9, 873

1999

9, 269

GDP Deflator (base year 1996)

118

113

(a) The thing that was real GDP in 1999 and 2000 measured in mil novecentos e noventa e seis prices? (b) What was the growth rate of real GROSS DOMESTIC PRODUCT between 1999 and 2000? (c) Do the economy produce more it happened in 1999 or in 2000?

two

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