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ECN 204 Lecture Notes - Corn Crib, Gdp Deflator, Corporate Bond

259 views4 pages
limecrow917
13 Feb 2013
School
Ryerson University
Department
Economics
Course
ECN 204
Professor
Tom Barbiero

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Document Summary

1. suppose that the annual rates of growth of real gdp of econoland over a five- year period were as follows: 3 percent, 1 percent, -2 percent, 4 percent, and 5 percent. Suppose that glitter gulch, a gold mining firm, increased its sales revenues on newly mined gold from million to million between one year and the next. Q: if the price of gold had not changed, what would have been the change in glitter. Thus, if mexico"s real gdp per person is growing at 7 percent per year, it will take about 10 years (= 70/ 7) to double. Apply the rule of 70 to solve the following problem. Real gdp per person in mexico in 2005 was about ,000 per person, while it was about ,000 per person in canada. Using year 3 as the base year, calculate the price index for each year.

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Related Questions

QUESTION 31

Suppose that twenty-five years ago a country had nominal GDP of $1,800, a GDP deflator of 150, and a population of 100. Today it has nominal GDP of $2,800, a GDP deflator of 270, and population of 180. What happened to the real GDP per person?

It more than doubled

It increased, but it less than doubled

It was unchanged

It decreased

1 points

QUESTION 32

During a presidential campaign, the incumbent argues that he should be reelected because nominal GDP grew by 12 percent during his 4-year term in office. You know that population grew by 4 percent over the period and that the GDP deflator increased by 6 percent during the past 4 years. You should conclude that real GDP per person

grew by 2%

grew by 6%

grew by 8%

grew by 12%

1 points

QUESTION 33

Suppose today’s CPI is 134.85, and suppose one must spend $986 today to purchase the same basket of goods and services that could be bought for $680 in 1989. Then the CPI in 1989 was

24.27

60.68

93.00

195.53

1 points

QUESTION 34

If your firm’s production function has a decreasing returns to scale and you increase all your inputs by 60%, then your firm's output will

not change

increase, but by less than 60%

increase by 60%

increase by more than 60%

QUESTION 36

Suppose country's nominal GDP tripled, population grew by 40%, and prices doubles over the last 25 year. What happened to nominal GDP per person?

increased by 114%

increased by 93%

increased by 87%

decreased by 69%

1 points

QUESTION 37

A barber shop produces 288 haircuts a day. Each barber in the shop works 8 hours per day and produces the same number of haircuts per hour. If the shop’s productivity is 3 haircuts per hour of labor, then how many barbers does the shop employ?

8

12

16

None of the above is correct

1 points

QUESTION 38

If the nominal interest rate is 11% and the rate of inflation is 6%, then the real interest rate is

-5%

1.67%

5%

11%

1 points

QUESTION 39

Last year real GDP in Greatland was 651 billion and the population was 2.4 million. The year before, real GDP was 460 billion and the population was 1.9 million. What was the growth rate of real GDP per person during the year?

12 percent

10 percent

4 percent

2 percent

1 points

QUESTION 40

If real GDP increases by 40% and the GDP deflator decreases by 10%, then nominal GDP increases by

40%

30%

26%

-10%

Suppose that the annual growth in real income in Japan is expected to be between 2 and 3 percent and that the income elasticity of demand for housing in Tokyo is estimated to be between 0.8 and 1.0 for rental units and between 0.7 and 1.5 for owner-occupied housing.

a. What will be the growth in demand for rental units over the next 10 years? Explain.

b. What will be the growth in demand for owner-occupied units over the next 10 years? Explain.

Note: The two annual growth rates in real income (and two corresponding income elasticities) should be considered separately (rather than taking an average). Doing so would allow you to have four different growth-in-demand scenarios for each question to consider and compare in terms of different growth rates associated with different income elasticities. Also, the compounded growth in real income over the next 10 years should be used in your analysis.

Suppose that the annual growth in real income in Japan is expected to be between 2 and 3 percent and that income elasticity of demand for housing in Tokyo is estimated to be between 0.8 and 1.0 for rental units and between 0.7 and 1.5 for owner-occupied housing.

a. What will be the growth in demand for rental units over the next 10 years? Explain.

b. What will be the growth in demand for owner-occupied units over the next 10 years? Explain.

Note: The two annual growth rates in real income (and two corresponding income elasticities) should be considered separately (rather than taking an average). Doing so would allow you to have four different growth-in-demand scenarios for each question to consider and compare in terms of different growth rates associated with different income elasticities. Also, the compounded growth in real income over the next 10 years should be used in your analysis.