Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 9, Problem 7WNG
To determine
Explain the relationship between recessionary gap, inflationary gap or long run equilibrium.
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Given the following: Ca = $450, Ig = $250, Xn = − $10, and G = $30, what is the economy’s GDP.
nGDP= nominal GDP
rGDP= real GDP
Part a) Fill in the rest of the table.
Part b) Calculate the growth of real GDP from 2012 to 2013 and from 2013 to 2014 using 2012 real GDP prices.
Part c) Calculate the growth of real GDP from 2012 to 2013 and 2013 to 2014 using either 2013 or 2014 real GDP prices. What is the relationship between the answer in part b to part c?
What is the relationship of the GDP deflator to real GDP?
To make comparisons across time or across borders, one must use the notion of a GDP deflator to convert nominal GDP into real GDP for comparisons. Nominal variables are in current dollars and have price level changes such as inflation and deflation included in them. Real variables are in constant dollars due to the factoring out of price level changes using a base year and a deflator.
What is the current nominal GDP for the US economy?
What is the current real GDP for the US economy?
Chapter 9 Solutions
Macroeconomics
Ch. 9.1 - Prob. 1STCh. 9.1 - Prob. 2STCh. 9.1 - Prob. 3STCh. 9.2 - Prob. 1STCh. 9.2 - Prob. 2STCh. 9.2 - Prob. 3STCh. 9.3 - Prob. 1STCh. 9.3 - Prob. 2STCh. 9.3 - Prob. 3STCh. 9 - Prob. 1QP
Ch. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 9QPCh. 9 - Prob. 10QPCh. 9 - Prob. 11QPCh. 9 - Prob. 12QPCh. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Prob. 16QPCh. 9 - Prob. 17QPCh. 9 - Prob. 18QPCh. 9 - Prob. 1WNGCh. 9 - Prob. 2WNGCh. 9 - Prob. 3WNGCh. 9 - Prob. 4WNGCh. 9 - Prob. 5WNGCh. 9 - Prob. 6WNGCh. 9 - Prob. 7WNG
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- If consumption is $11 trillion, investment is $2 trillion, government purchases are $3 trillion, exports are $2 trillion and imports are $3 trillion, calculate GDP. Use the formula GDP = C + I + G + (X – IM). I suggest just leaving the numbers in trillions (rather than adding in 9 extra zeroes).arrow_forwardIn 2019, Mr. Francis paid $10m for a house that was built in 2019 and sold that year for $8m. What value will this transaction add to GDP in 2020?arrow_forwardThe natural level of real GDP is that level ofarrow_forward
- If U.S. government statistics counted education spending as part of the investment, which of the following would rise, which would fall, and which would remain unchanged? You might use rise, fall, and stay unchanged more than once each or you might not. Consumption Investment Gross domestic productarrow_forwardWhat is the level of nominal GDP in France this year? FRED tells you that the real GDP is chained in a specific year (this means that it is evaluated in terms of constant prices for that year). Note that the real GDP and the nominal GDP series cross at one point. Why does this happen? ANSWER FROM THE GARPH.arrow_forwardThe difference between nominal GDP and real GDP is: real GDP adjusts for inflation real GDP excludes imports and exports nominal GDP adjusts for inflation nominal GDP measures actual productivityarrow_forward
- If you read in the newspaper that the United States’ 2015 real GDP declined while nominal GDP for 2015 grew, how could you explain this?arrow_forwardTrue or false GDP is a macroeconomic concept.arrow_forwardHow Real GDP is measured? Explain Real GDP of the United States at present time.arrow_forward
- Identify the following variables as more variable than GDP or less variable than GDP: (1) consumption, (2) investment, and (3) unemployment.arrow_forwardGiven the following: consumption = 430, investment = 300, government expenditure = 150 and net export = -70, what is the economy’s GDP ?arrow_forwardFor each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction C I G X M The Pennsylvania Department of Transportation, a state administration, fixes potholes along PA highway 23, which feeds into the center of Conshohocken. Felix's employer upgrades all of its computer systems using U.S.-made parts. Janet's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. Janet gets a new video camera made in the United States. Felix buys a sweater made in Guatemala.arrow_forward
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