Discussion Questions
Question 1: What are the main reasons why Nigerians living in extreme poverty? Justify. ( 7) Question 2: Why GDP per capita wouldn't be an accurate measure of the welfare of the average Nigerian? Explain.
Question 3: Refer to Table 1. Assume that this economy produces only three goods Good X Good Y, Good Z. You must show your calculation step by step.
Table 1
|
Production
|
Prices
|
|
|
Year 1
|
Year 2
|
Year 3
|
Year 1
|
Year 2
|
Year 3
|
|
Good X
|
60
|
65
|
75
|
$2.00
|
$2.20
|
$2.20
|
|
Good Y
|
110
|
115
|
125
|
$0.80
|
$1.00
|
$1.00
|
|
Good Z
|
135
|
140
|
145
|
$1.00
|
$1.20
|
$1.20
|
a. Calculate the value for this economy's nominal GDP in year 1.
b. Calculate the value for this economy's nominal GDP in year 2.
c. Calculate the value for this economy's nominal GDP in year 3.
d. Compare nominal GDPs of Year 1, Year 2 and Year 3 and comment.
e. Consider Year 1 as base year. Calculate Real GDP for year 1 and Year 2.
f. Calculate GDP deflator for Year 1 and Year 2. Make a comment based on GDP deflator values for Year 1 and Year 2.
Question 4: Explain the various phases in business cycle (shown as in figure 1). In particular what it means to be in terms of unemployment/employment, income, production and business investment in plants, equipment, and business inventory investment when the economy passes through each phase: (i) trough, (ii) expansion/recovery, (iii) peak and (iv) recession. Give example for each phase.
Attachment:- Case scenario.rar