Problems and applications – GDP and CPI môn Chuyên ngành Marketing | Học viện Nông nghiệp Việt Nam

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Problems and applications – GDP and CPI I. GDP
1. Explain why an economy’s income must equal its expenditure.
2. Which contributes more to GDP – the production of a tonne of wheat or the
production of a tonne of steel? Why?
3. Over the last three years, Lynn paid $3000 to put together her wardrobe. Today,
she sold most of her clothes at a garage sale for $200. How does this sale affect current GDP?
4. List the four components of GDP. Give an example of each.
5. In the year 2011, the economy produces 100 serves of fish and chips for $8 each.
In the year 2012, the economy produces 200 serves of fish and chips for $10 each.
Calculate nominal GDP, real GDP and the GDP deflator for each year. Use 2011
as the base year. By what percentage does each of these three statistics rise from one year to the next year?
6. What components of GDP (if any) would each of the following transactions affect? Explain.
a. A family buys a new air conditioner
b. Uncle Macro buys a new house
c. Toyota sells a car from its inventory d. You buy a pizza
e. The government creates a bike path around Hanoi
f. Samsung expands its factory in Bac Ninh.
7. The “government purchases” component of GDP does not include spending on
transfer payments such as pension benefits. Thinking about the definition of GDP,
explain why transfer payments are excluded. 8. Year P of rice Q of rice P of fish Q of fish 2000 3 100 10 50 2001 3 120 12 70 2002 4 120 14 70
2000 is the base year. Calculate:
a. Nominal and real GDP, GDP deflator in each year
b. Inflation (change in the price) in 2001 and 2002
c. Economic growth rate (change in real GDP) in 2002 II. CPI
1. Which do you think has a greater effect on CPI: A ten percent increase in the
price of an Ipod or 10 percent increase in the price of petrol? Why?
2. Suppose that the residents of Veggieland spend all of their income on cauliflower,
broccoli and carrots. In 2011, they buy 50 heads of cauliflower for $100, 50
bunches of broccoli for $90 and 600 carrots for $75. In 2012, they buy 60 heads
of cauliflower for $200, 60 bunches of broccoli for $100 and 600 carrots for $150.
IF the base year is 2011, what is the CPI in both years? What is inflation rate in 2012? lOMoAR cPSD| 47028186
3. Which is the problems in the contruction of the CPI might be illustrated by each of following situations? a. The invention of the Ipad
b. The introductions of hybrid cars
c. Decreased banana purchases in response to an increase in their price
d. Increased purchases of the smart car.
4. Your income rises from 19 million to 31 million. In that period, CPI increases
from 122 to 169. How does your living standard change?
Included or not included in GDP?
(a) Interest on an AT&T bond.
(b) Social security payments received by a retired factory worker.
(c) The services of a family member in painting the family home. (d) The income of a dentist.
(e) The money received by Smith when she sells her economics textbook to a book buyer.
(f) The monthly allowance a college student receives from home.
(g) Rent received on a two-bedroom apartment.
(h) The money received by Josh when he resells his current-year-model Honda automobile to Kim.
(i) The publication of a college textbook.
(j) A 2-hour decrease in the length of the workweek.
(k) The purchase of an AT&T corporate bond.
(l) A $2 billion increase in business inventories..
(m) The purchase of 100 shares of GM common stock.
(n) The purchase of an insurance policy.