CAS EC 102 Lecture Notes - Antique Car, Black Market, Real Change

50 views3 pages

byzantiumbeaver810

12 Mar 2014

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

crimsonantelope381 and 36670 others unlocked

CAS EC 102 Full Course Notes

Verified Note

6 documents

Document Summary

2000 years ago, average gdp was < . per person. From 1000 ad, to about 1800 economic output per person improved slightly but average was about per person. Not much real change between roman empire and us independence. Starting in early 1800s, output in the world started to increase dramatically. Population and gdp per person were low and fixed for thousands of years. During these times, easiest way for country to gain a bigger share of small fixed economic pie was to . Economic growth has lowered but not eliminated chance of war because one cause is now off the table. North america currently produces about of world output. Amount of land and natural resources are not directly related to gdp. Sub-saharan african covers a huge amount of land and has lots of gold and diamonds but only creates 2% of total world output. Latin america is roughly the same size, but produces times sub-saharan.

Related Questions

Data for 9-4 Homework: Problem Set

GDP	Taxes	DI	C	I	G	C+I+G
1250	200		800	300	200
1500	200		1000	300	200
1750	200		1200	300	200
2000	200		1400	300	200
2250	200		1600	300	200
2500	200		1800	300	200
2750	200		2000	300	200

This table represents several different potential output scenarios for a hypothetical economy. Based on the information presented, complete the following:

1. Calculate the Disposable Income (DI) at each level of GDP.
2. Calculate total spending (C+I+G) at each level of GDP.
3. What is the equilibrium level of GDP in the economy?
4. When the economy is at equilibrium, what is the level of saving?
5. What is the value of the MPC?
6. What is the value of the expenditure multiplier?
7. What is the value of the tax multiplier?
8. If the government increases spending by $100, what would be the new equilibrium value of GDP?
9. If the government wanted to achieve the same change in GDP as in part 8 by cutting taxes instead of increasing spending, how large would the tax cut need to be?

redhornet138

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 todayâs 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 firmâs 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 shopâs productivity is 3 haircuts per hour of labor, then how many barbers does the shop employ?

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%

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 are two goods in the economy, Xylophones (X) and Yams (Y). In year t, consumers in the economy purchase 20 Xylophones at a price of $20 each and 100 Yams at a price of $2 each. In year t + 1, consumers in the economy purchase 18 Xylophones at a price of $30 each and 150 Yams at a price of $2.50 each.

1. Calculate the GDP deflator in years t and t + 1 with base year t. What is inflation according to this deflator? Show each step. (Hint: it will be helpful for you to first calculate nominal and real GDP in years t and t + 1. When you calculate real GDP, make sure that you use the appropriate base year).

2. Calculate the GDP deflator in years t and t + 1 with base year t + 1. What is inflation according to this deflator? Show each step. (Hint: you will need to calculate real GDP in years t and t + 1 using a different base year than you used in part 1. Once you calculate real GDP with the appropriate base year, you will follow the same steps that you did in part 1.)

3. Compare your answers to a and b above. Are they the same? If not, why not? How does chain-weighting address any potential difference?

4. Calculate the CPI in years t and t + 1, using year t as the base year.

5. Describe two ways in which the CPI differs from the GDP deflator.

6. There are several problems with using the CPI to calculate real GDP and measure growth. One of these problems is that the CPI does not account for changes in the quality of goods sold over time. A computer today is significantly more efficient than it was even just ten years ago, so even if the price of computers rise with inflation, you are getting significantly more computing power per dollar. How would this bias estimates of GDP growth and inflation?

CAS EC 102 Lecture Notes - Antique Car, Black Market, Real Change

CAS EC 102 Full Course Notes

Document Summary

Get access

Related Documents

CAS EC 102 Chapter Notes - Chapter 5: Formal Methods, Business Cycle, Gdp Deflator

CAS EC 102 Lecture Notes - Lecture 6: Potential Output, Infant Mortality, Physical Capital

CAS EC 102 Lecture Notes - Lecture 2: Statistical Inference, Potential Output, Stock Market Crash

Related Questions