Assignment :
Question 1. Is the value of a house built in 2000 and resold in 2008 included in the GDP of 2008? Why or why not? Would the services of the real estate agent who helped sell (or buy) the house in 2008 be counted in GDP for 2008? Why or why not?
Question 2. What components of GDP (if any) would each of the following transactions affect? Explain.
a. A family buys a new refrigerator.
b. A firm buys 50 new robots for one of its existing plants.
Question 3. Below are some data from the land of milk and honey.
|
Year
|
Price of Milk ($)
|
Quantity of Milk (Quarts)
|
Price of Honey ($)
|
Quantity of Honey (Quarts)
|
|
2005
|
1
|
100
|
2
|
50
|
|
2006
|
1
|
200
|
2
|
100
|
|
2007
|
2
|
200
|
4
|
100
|
a. Compute nominal GDP, real GDP and the GDP price index for each year, using 2005 as the base year.
Question 4. Use the data in the following table to calculate the GDP price index for each year (values are in billions of dollars).
|
Year
|
Nominal GDP
|
Real GDP
|
|
2002
|
10,470
|
10,049
|
|
2003
|
10,961
|
10,301
|
|
2004
|
11,713
|
10,704
|
|
2005
|
12,456
|
11,049
|
|
2006
|
13,247
|
11,415
|
a. Calculate the GDP price index for each year.
Question 5. If the quantity of final goods and services produced decreased, could real GDP increase? Could nominal GDP increase? If so, how?
Question 6. The Bureau of Labor Statistics announced that in July 2005, of all adult Americans, 142,076,000 were employed, 7,497,000 were unemployed, and 76,580,000 were not in the labor force. Use this information to calculate:
a. the labor force
c. the unemployment rate
Question 7. A person's nominal income rises from $20,000 to $24,000, and the CPI increases from 100 to 108. How much does real income rise/ fall?
Question 8. Use the following data to calculate the Unemployment Rate.
Full-time employed 80
Part-time employed 25
Unemployed 15
Discouraged workers 5
CPI 117.4
Question 9. If the CPI was 184.6 in 2003 and 190.6 in 2004, what is the inflation rate for 2004?
Question 10. If the Unemployment Rate is 7.6% and there are 8.4 million people officially unemployed, how many people are in the labor force?