Assignment 2A

  1. The table below gives information about the goods and services produced in the nation of Jamesland in 2000 and 2001.  The year 2000 is the base year.
  2000 2001
  Price Quantity Price Quantity
Shoes $50 800 $58 900
Pizzas $12 2,000 $11 1,900
Books $25 1,000 $28 1,200

 

  1. Calculate the nominal GDP for 2000 and 2001.
  2. Calculate the real GDP for each year.
  3. Calculate the price index in 2000 and 2001?

 

2.            You are presented with the following figures for Real GDP in billions of dollars

Real GDP in 2006 $13,060.7
Real GDP in 2007 $13,363.5
Real GDP in 2008 $12,993.7
Real GDP in 2009 $13,019.0

 

  1. Calculate the growth rate for 2007.
  2. Calculate the growth rate for 2008.
  3. Calculate the growth rate for 2009.

 

3. What is GDP per capita and why is a useful measure?
4. Use the internet to find the country with the highest GDP per capita. Where does the U.S. fall in an international ranking of GDP per capita? Are you surprised by the results of your research? Please site your source.
5. Suppose your boss tells you that at the end of the year you will receive a $1,000 raise. You begin the year with a salary of $43,000.
a. What is your salary increase as a percent change?
b. Suppose the price index for the year is 1.04. How much did prices change during the year?
c. When you consider your raise, are you “winning” or “losing?” Explain.
continued
6. You deposit $1,000 for one year at 4% interest.
a. At the end of the year how much do you have in nominal dollars?
b. If inflation is 5% during the year, how much will you have in real dollars at the end of the year?

 

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