Calculate the nominal gdp for each year calculate the real

Question

Assignment

Part A.

1- Consider the following economy:

Year	Price 1	Quantity 1	Price 2	Quantity 2	Price 3	Quantity 3
2012	3.25	115	5.75	141	9.75	85
2013	3.5	120	6.25	143	11	85
2014	4	122	6.25	145	12	90
2015	4.275	125	6.75	148	12.5	95
2016	4.5	130	7	149	13.25	100

a) Calculate the Nominal GDP for each year

b) Calculate the real GDP for each year using 2012 as the base year

c) Calculate the GDP deflator for each year.

Year	Nominal GDP	Real GDP	GDP Deflator
2012	2013.25	2013.25	100
2013	2248.75	2041	110.2
2014	2474.25	2107.75	117.4
2015	2720.875	1486.25	183.07
2016	2953	2254.25	131.0

2- For the table below: GDP deflator = 108.9

a) Calculate the amount of Real Exports X.
b) Calculate the RealGDP (Y = C + I + G + NX).

I= Y- C - G

Y = $4800 + I + $2150 + -$775

c) Calculate the amount of investment I

I= Y- C - G

d) Fill out the rest of the table for nominal values.

Items		Real	Nominal Values
Personal Consumption expenditures	C	$4800
Gross Private Domestic Investments	I
Gov. Purchases of goods and services	G	$2,150
Exports	X
Imports	M	2,250
Net Exports	NX	-$775
GDP			10,617.75
GDP deflator = 108.9

Note that NX = net exports= exports - imports

3- Annual growth rates

GDP (2010)= 35,000 ; GDP ( 2011) = 34,900;GDP (2012) = 35,750 GDP (2013) = 37,000; GDP (2014)= 38,000 ; GDP (2015)= 38,000;

a) Calculate the annual growth rate between 2010-2011.

b) Calculate the annual growth rate between 2010-2012

c) Calculate the annual growth rate between 2013-2015.

d) Calculate the annual growth rate between 2014 and 2015.

4- Calculate the missing terms: Use the formulafor the annual growth rate and apply the properties of the LN (Natural Log) function (or simply use the formula that is already given in the formula sheet).

1- g =1.55 XZ= 1500 v = 5 calculateXt =?
2- g =3.25 Xt= 500 XZ = 600calculate v = ?
3- g =1.15Xt= 900 v = 4 calculate XZ= ?

Part B

1. Consider the following economy

C_a = 1800 - 15 R;c= 0.65 ;T_a = 1,750 ; t = 0 ; I_P = 20(150 - R ) ; G = 2,100 ; X = 1,800 ; NX = -1,275. Assume nx = 0.

a) Compute the marginal propensity to save
b) Calculate the amount of imports for this country
c) Compute the multiplier
d) Derive the equation of the autonomous spending and compute its value for R = 3.25
e) Derive the IS curve and compute its value for R= 3.25.

2. Consider the following economy

C = C_a +0.80 (Y - T); C_a = 500 - 25R ; T = 300 + 0.245 Y; I_P = 1800 - 35 R ; G = 1800; NX = 750 - 0.08 Y.

a) What are the values of the autonomous net export NXa and the autonomous taxes Ta (hint: see the formulas and compare)
b) Compute the multiplier
c) Derive the equation of the autonomous spending.
d) Derive the equation of the IS curve
e) Compute the values of the A_P and Y_IS for r =17/4
f) Compute the values of the C_a, C, T, I_P, and NX for income Y = 20,000 and R = 4.25. Is this country a net importer or net exporter?

3. Consider the following economy

C_a= 1,780; c = 0.55; T = 1400 + 0.175 Y; I_P = 1800; G = 1600; NX = 750 - 0.0075 Y.

a) What is the value of the autonomous Tax Ta (Hint: see the formula and compare)
b) Compute the value of the multiplier
c) Derive the equation of the autonomous spending and calculate its value.
d) Derive the equation of the IS curve and calculate its value.
e) Compute the value of the new IS when government spending increases by 155. What is the difference between the two IS values?

4. Consider the following economy:

C_a = 10 (32.5 - 1.5R); c = 17/20 ;T = 240 + (3/20) Y; I_P = 10 (12.75 - 2.5 R) ; G = 2,500; NX = 800 - 0.08 Y.

a) What are the values of the autonomous net exports and autonomous Tax Ta (Hint: see the formula and compare)
b) Compute the value of the multiplier
c) Derive the equation of the autonomous spending
d) Find the equation of the IS curve
e) Graph the autonomous Spending using the points for R = 2, 4, 6, 8, 10, 12, 14, 16, 18, 20, 25, 30 (Excel will be best).
f) From e, graph the IS curve.