3. Figure 6.23 is a scatterplot of data from the World Bank. The individuals are all the world's nations for which data are available. The explanatory variable is a measure of how rich a country is, which is 80 Costa Rica 70 USA 60 Namibia 50 Gabon Botswana 40 5000 10,000 20,000 Gross domestic product per person Figure 6.23 A scatterplot of the life expectancy of people 25,000 30,000 15,000 in many nations against each nation's GDP per person, for Exercise 3. Life expectancy (years) ng Data: Relationships the gross domestic product (GDP) per person. GDP is the total value of the goods and services produced in a country, converted into dollars. The response variable is life expectancy at birth. Three African nations are outliers, with lower life expectancy than usual for their GDP. A full study would ask what special circumstances explain the ot these outliers. (a) Describe the direction and form of the relationship. Aside from the outliers, it is moderately strong. gth) (b) Explain why the direction and form of this al? relationship make sense.

3. Figure 6.23 is a scatterplot of data from the World Bank. The individuals are all the world's nations for which data are available. The explanatory variable is a measure of how rich a country is, which is 80 Costa Rica 70 USA 60 Namibia 50 Gabon Botswana 40 5000 10,000 20,000 Gross domestic product per person Figure 6.23 A scatterplot of the life expectancy of people 25,000 30,000 15,000 in many nations against each nation's GDP per person, for Exercise 3. Life expectancy (years) ng Data: Relationships the gross domestic product (GDP) per person. GDP is the total value of the goods and services produced in a country, converted into dollars. The response variable is life expectancy at birth. Three African nations are outliers, with lower life expectancy than usual for their GDP. A full study would ask what special circumstances explain the ot these outliers. (a) Describe the direction and form of the relationship. Aside from the outliers, it is moderately strong. gth) (b) Explain why the direction and form of this al? relationship make sense.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter19: The Macroeconomic Perspective

Section: Chapter Questions

Problem 28P: Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100...

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Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100 worth of trees into 150 worth of lumber. It used 100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nations GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?
What are the two main difficulties that arise in comparing different comparing GDP?
Would you usually expect GDP as measured by what is demanded to be greater than GDP measured by what is supplied, or the reverse?
G. Menges developed the following econometric model for the West German economy*: Yt = β0 + β1Yt−1 + β2 It + u1tIt = β3 + β4Yt + β5 Qt + u2tCt = β6 + β7Yt + β8Ct−1 + β9 Pt + u3tQt = β10 + β11 Qt−1 + β12 Rt + u4t where Y = national incomeI = net capital formationC = personal consumptionQ = profitsP = cost of living indexR = industrial productivityt = timeu = stochastic disturbances Required: a. Which of the variables would you regard as endogenous and which asexogenous?b. Is there any equation in the system that can be estimated by thesingle-equation least-squares method?c. What is the reason behind including the variable P in the consumption function?
If all quantities produced rise by 5 percent and allprices fall by 5 percent, which of the following bestdescribes what occurs?a. Real GDP rises by 5 percent, while nominalGDP falls by 5 percent.b. Real GDP rises by 5 percent, while nominalGDP is unchanged.c. Real GDP is unchanged, while nominal GDP risesby 5 percent.d. Real GDP is unchanged, while nominal GDP fallsby 5 percent.
What counts as GDP (II)? By how much does GDP rise in each of the fol-lowing scenarios? Explain. (a) A computer company buys parts from a local distributor for $1 million,assembles the parts, and sells the resulting computers for $2 million.(b) A real estate agent sells a house for $200,000 that the previous ownershad bought 10 years earlier for $100,000. Te agent earns a commissionof $6,000.(c) During a recession, the government raises unemployment benefts by$100 million.(d) A new U.S. airline purchases and imports $50 million worth of airplanesfrom the European company Airbus.
Consider the following NIPA data for 1Q2021 (First Quarter 20210 $ billlion) Investment: Non Residential $2,948.3 Exports $2,305.3 PCE Goods $5,183.5 Investment: Residential $1,043.7 Government Expendiures Federal $1,557.0 PCE Services $9,857.7 Imports $3,152.3 Governemnt Expenditures : State and local Goernent Expenditures $2,395.9 Change in private inventories -$90.1 1. Write the formula for GDP Compute the following: 2. Personal Consumption Expenditures (PCE): 3. Gross Private Domestic Investment (GPDI) 4. Net Exports (NX) 5. Government Expenditures (GOV) 6. GDP
a) Let’s assume the real GDP of country Z is increasing. James concludes that now the citizens ofcountry Z can enjoy more goods and services. Why might his conclusion be wrong? Discuss indetail.b) The GDP of country A is higher than GDP of country B. Floyd concludes that the total incomeof the citizens of country A must be greater than country B. Why might his conclusion be wrong?When might his conclusion be correct?
Suppose that there are two individuals in an economy, Person 1 and Person 2. Person 1 buys asecond-hand car from Person 2 for $12,000.10. What is the change in GDP according to the Income Approach here? What is the changeof each person’s contribution to GDP according to the Income Approach? Suppose now instead that an individual was buying $400 of wine from a domestic producer ofwine. Now suppose that this individual decides to import $400 of wine instead.11. What is the change of Consumption (C), Investment (I), Government Spending (G), NetExports (NX), and GDP as calculated by the Expenditure Approach in this example?Finally, now consider the following table:Government Purchases of Goods andServices$58.5Indirect Taxes Less Subsidies $29Personal Income Taxes $41.5Wages and Compensation $165.5Interest on Public Debt $15.5Consumption Expenditure $168.4Exports $90.9Depreciation $33.5Imports $93.3Gross Investment $67.2Net Interest Income $19.0Business Profits Before Taxes $45.512. What is…