Macroeconomics Homework 1 Essay

Question 33 Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012. What was the real GDP in 2013?

The following table shows nominal GDP and an appropriate price index for a group of selected years. Compute real GDP for each decade jump. Indicate in each calculation whether you are inflating or deflating the nominal GDP data.

Since more apartments are being built, there is a greater demand for the machinery used to produce them that will cause investments to increase. Since more people are looking to buy new apartments, residential investments will increase and will also lead to an increase in investments. In the category of government purchases, there would not be any dramatic changes according to the two articles because there is no mention that the government will dramatically change any of its spending habits. Net exports include exports and imports of the United States. This category of GDP will increase as well as more goods and services from the United States and foreign countries are demanded in order for constructors to keep up with the increasing demand for apartments. As a result of the increase in consumption, investments and net exports, the total GDP in the next year should increase. This will cause an increase in real GDP because the prices of the base year will remain the same as there is an expected increase in quantity of apartments in the next year. This will also cause an increase in nominal GDP because there will be an increase in prices of the apartments in the next year as the quantity and demand for

i. Calculate the growth rate of real GDP for each year from 1994 to 1997.

the market value of all goods and services produced within a country in a given period of time.

In view of the weak economy of the last several years, explain which of the four components of GDP had, or is having, the greatest positive impact in our economy. Use your results from the second e-Activity to support your response.

GDP deflator 2013 = two hundred dollars divided by two hundred dollars times one hundred equaling to one hundred. 2014 = four hundred dollars divided by four hundred dollars times one hundred equaling to one hundred. 2015 = eight hundred dollars divided by four hundred dollars times one hundred equaling to two hundred. b) Percentage change in nominal GDP for 2014 = $400 - $200 / $200*100 = 100 percent. 2015 =

After looking into the Bureau of Economic Analysis on the Department of Commerce’s website my results on the latest release for real GDP is as

This is because, the exports and imports had risen drastically which benefitted the economy. The government could use this to their advantage and implement what had caused the stunted GDP growth, in scenarios where the economy may be lacking or unstable.

2. Based on the table, what calculations must you make to determine GNP from GDP?

3. Which of the following would be included in GDP? payment of the monthly telephone

22) The above figure shows a graph of the market for pizzas in a large town. At a price of $14, there will be A) no pizzas supplied. B) equilibrium. C) excess supply. D) excess demand. Answer: C 23) The above figure shows a graph of the market for pizzas in a large town. At a price of $5, there will be A) excess demand. B) excess supply. C) equilibrium. D) zero demand. Answer: A 24) The above figure shows a graph of the market for pizzas in a large town. What are the equilibrium price and quantity? A) p = 8, Q = 60

In the United States, there is the growing macroeconomic issue over the rate of economic growth. This issue consists of the potential regression of the United States, Gross Domestic Product, commonly known as GDP. GDP can be defined as the market value consisting of all the goods and services that are produced in a country that falls within the given time period, usually marked as a fiscal year. In terms of economic growth, GDP will always have a direct correlation to growth within a country. An increase in GDP will lead to an increase in the economic growth rate, and contrastingly, a decrease in GDP leads to significant decrease in economic growth rate, also known as a recession. This current macroeconomic issue is presented due to the fact that the United States is poised for a year that is associated with an economic growth rate between 0% and 1%.

Real GDP can be calculated with the use of prices derived from a given base year, and this helps in the adjustment to changes in price. Through this perspective, it becomes possible for the real GDP to measure accurately changes relating to output

Based on the data that I have researched, I predict that for the duration of this year, the GDP will most likely increase, but not dramatically. According to Bloomberg’s business website, “The world’s largest economy is likely to skirt the worst damage from the so-called fiscal cliff, the more than $600 billion of federal spending cuts and tax increases that will automatically take effect at the start of next year unless Congress acts” (2012, Bloomberg.com). I got to this conclusion due to the fact that throughout last year, consumers and companies put a restraint on their spending. It did not hurt so much, but did not help as much when it comes to growth in the GDP.