MGEA06H3 Lecture Notes - Open Market Operation, Gdp Deflator, Bank Reserves

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beigeferret90

12 Apr 2013

School

UTSC

Department

Economics for Management Studies

Course

MGEA06H3

Professor

Iris Au

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MGEA06H3 Full Course Notes

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Gde = c + i + g+ nx. Issues related to national income: excludes nnp = gnp depreciation/cca, gdp - within country gnp by a country"s residents. Gdp only sold through the market. Excludes: pollution, illegal, volunteer, etc: nominal gdp vs real gdp. Real constant = pb x qn: gdp deflator = nominal/ real (pnqn)/(pbqn, correcting for price changes gdp b x (price index a/ price index b) Cost of bundle quantity doesn"t change: gdp deflator bundle produced within canada change current year bundle (understate, cpi by a typical canadian households base year bundle (overstate) Gdp deflator changes when prices of goods bought by firms or government changes. Cpi changes when prices of imported goods changes. Issues with inflation: reduces purchasing power of money, reduces the real value of anything, redistribution of wealth. Inefficiency solution: indexation (increases the monthly payment by the rate of inflation rate)

Related Questions

Calculate the missing data.

Calculate missing data from the table.

Income/Expenditure Flows	Amount (in billions)
Consumption expenditure	$7
Government expenditure	$5
Depreciation	$3
Net taxes	$2
Investment	$4
Net exports	$1
Expenditures
Income
GDP

Calculate the following.

Using the data from a partial set of national income and expenditure data, address the following:

Calculate gross domestic product (GDP) using the expenditure approach.

Determine net domestic product, gross national product (GNP), and statistical discrepancy.

Item	Amount in 2010 (in billions)
Government expenditure (G) =	$8
Consumption expenditure (C) =	$20
Investment (I) =	$5
Net exports (NX) =	$1.5
GDP (expenditure approach)=
Total wages =	$21
Net operating surplus =	$11
Net domestic product =
Indirect taxes minus subsidies =	$3.5
Capital consumption =	$2
GDP (income approach)=
Statistical discrepancy =
Net factor income from abroad =	$5.5
GNP =

Consider the tables.

Given production and price data below, address the following:

Calculate an economy's nominal GDP and real GDP.

In 2000:

Item	Quantity (millions)	Price ($/unit)	Expenditure (millions of $)
Socks	15	5	75
SIM cards	20	2	40
Defense Budget	9	5	45

Real/Nominal GDP = 160

In 2003:

Item	Quantity (millions)	Price ($/unit)	Expenditure (millions of $)
Socks	15	5	75
SIM cards	20	5	100
Defense Budget	20	10	200

Nominal GDP =

2003 Quantities valued at 2000 prices:

Item	Quantity (millions)	Price ($/unit)	Expenditure (millions of $)
Socks
SIM cards
Defense Budget

Real GDP =

Answer the following questions.

How do you measure GDP?

How do you measure real and nominal GDP?

How do you determine Consumer Price Index and what are its limitations?

Which of the following expenditures will be included in GDP which will be excluded from the calculation? Explain your answers.

Spare tires bought by Across America, a car rental company

Textbooks bought by college students

Cabinets purchased by a furniture store

A new car purchased by an NFL player

A cruise ship bought by Carnival

MGEA06H3 Lecture Notes - Open Market Operation, Gdp Deflator, Bank Reserves

MGEA06H3 Full Course Notes

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