eco
ericiito02
ps.pptx“It doesn’t make sense that intermediate goods are not counted in GDP. A computer chip is an intermediate good, and without it a PC wont work. So, why don’t we count the computer chip in GDP?” Explain.
Dr. DHAKAL
1
Q1.
Q2.
Is the value of a house built in 2006 and resold in 2015 included in the GDP of 2015? Would the services of the real estate agent who helped sell the house in 2015 be counted in the GDP of 2015? Explain.
Which component of GDP is affected by each of the following? Why? If it does not affect the GDP, why not? (Assume that the new cars are made in the U.S. this year)
You purchase a new Ford Escape Hybrid from a Ford dealer
You purchase a 2011 Ford Escape Hybrid from a friend
Ford purchases door handles for the Escape from a manufacturer in Georgia
Ford produces 1000 Escapes in a factory in Georgia and ships them to China
Ford purchases new machine tools to use in its Georgia Escape factory
The state of Georgia builds a new highway to help improve access to the Ford Escape plant
Dr. DHAKAL
2
Q3.
| 2009 | 2014 | 2015 | ||||
| PRODUCT | QUANTITY | PRICE | QUANTITY | PRICE | QUANTITY | PRICE |
| Shoes | 90 | $50 | 100 | $60 | 100 | $65 |
| Hamburgers | 75 | $2 | 100 | $2 | 120 | $2.25 |
| Shirts | 50 | $30 | 50 | $25 | 65 | $25 |
| Cotton | 100 | $0.8 | 800 | $0.60 | 120 | $0.70 |
Dr. DHAKAL
3
In the table below, assume that the listed goods are the only
four goods produced in the economy. Also assume that all the
cotton is used in the production of shirts.
Calculate the nominal GDP for 2015.
Calculate the real GDP for 2014 and 2015, assuming that the
base year is 2009.
c) Calculate the GDP deflator for 2015.
Q4.
Which type of unemployment is the following?
Joe is temporarily unemployed because he voluntarily quit his job with Starbucks and will begin a better job next week with Dunkin Donuts.
Amy has lost her job in a Massachusetts textile plant because of import competition. She intends to take a short course in electronics and move to California where she anticipates a new job will be available.
Kim voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand she is now searching for a position in management.
Phil lost his job as a Wal-Mart employee when Wal-Mart laid off 1000 workers during the 2007-2008 recession.
Dr. Dhakal
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Q5.
Dr. Dhakal
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Use the information below to calculate the inflation rate for
2014, as measured by the CPI.
| 1999 (Base Year) | 2013 | 2014 | ||||
| Products | Quantity | Price | Price | Q | Price | Q |
| Haircuts | 2 | $10 | $11 | 5 | $16.20 | 8 |
| Hamburgers | 10 | $2 | $2.45 | 15 | $2.40 | 16 |
| DVDs | 6 | $15 | $15 | 10 | $14 | 12 |
Q6.
Q7.
The Apollo program cost approximately 25 billion dollars at the
time it was implemented in 1969. Given that the CPI was 36.7
in 1969 and 229.6 in 2012, determine the cost of the Apollo
program in 2012 dollars.
Dr. Dhakal
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