ECO 304L Lecture Notes - Lecture 2: Gdp Deflator, Gini Coefficient
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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
There are five questions. Each question is worth one point. Consider the following list of data for a country for a given year. Amounts are in billions of dollars. Your answers should be based on the U.S. national-accounts. In your answers, you may refer to the items by the abbreviations shown.
Item | Amount |
Consumption (C) | 65 |
Depreciation (DEPR) | 20 |
Government Consumption and Gross Investment (G) | 18 |
Gross Private Domestic Investment (I) | 30 |
Household Production (HP) | 20 |
Household Purchases of Stocks and Bonds (ST) | 50 |
Interest (INT) | 2 |
Net Exports of Goods and Services (NX) | -3 |
Net Income of Foreigners (NIF) | -1 |
Profits (PROF) | 7 |
Proprietorsâ Income (PRIN) | 4 |
Rent (RENT) | 4 |
Sales Taxes (STAX) | 4 |
Wages (W) | 70 |
1. Compute national income. Show your work.
2. Compute GDP via the âresource-cost incomeâ approach. Show your work.
3. Compute GDP via the âexpendituresâ approach. Show your work.
4. Two items in the list are negative. How can these items be negative and yet be components of GDP? Could these items be positive and still be components of GDP? Explain carefully and thoroughly.
5. Two items in the list are not part of the answers to 1-3. Which are the items and why do they not enter the answers? Explain carefully and thoroughly.