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examples of problems

examples of problems. Calculating G DP ( expenditure approach ). Use the table below to calculating GDP . GDP = C + G + I + ( E X - I M) In this case : C = $304. G  = $156.  I  = $124.  ( E X - I M)  = $18. Therefore: GDP = $304 + $156 + $124 + $18 GDP = $602.

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examples of problems

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  1. examples of problems

  2. CalculatingGDP (expenditure approach) Use the table below to calculating GDP. GDP = C + G + I + (EX - IM) In this case: C = $304.G = $156. I = $124. (EX - IM) = $18.Therefore: GDP = $304 + $156 + $124+ $18 GDP = $602

  3. CalculatingGDP (income approach) • Compensations of employees +  • Rentalincome + Interest income + Profits +Indirect Business Taxes + Depreciation • W= $67R= $75. i= $150.PR= $200.IBT = $74 • D = $36 • Therefore:GDP = $67 + $75 + $150 + $200+$74 + $36 • GDP = $602

  4. Calculating GNP, NNP and National Income GNP = GDP + NFIA Net Factor Income from Abroad = Receipts of factor income from the rest of the World – Payments of factor income to the rest of the World GNP = $ 602 + $12 = $ 614 NNP = GNP – Depreciation NNP = $ 614 – $36 = $ 578 National Income = NNP - indirect taxes NI = $ 578 - $74 = $504

  5. Calculating Nominal and Real GDP

  6. Measuring Unemployment The Bureau of Statistics conducts a monthly survey to estimate the unemploymentrate. Respondents’ answers are used to estimate the number of people who are employed,unemployed, and in the labor force. a. Calculate the unemployment rate. b. Calculate the unemployment rate taking into account discouraged workers. a. Unemployment rate= 12,036/(99,093 + 12,036) = 10.83% b. (12,036 + 1,849)/(99,093 + 12,036 + 1,849) = 12.29%

  7. Measuring Unemployment Use the information in the figure to calculatethe unemployment rate and the labor force participation rate.

  8. Measuring CPI, GDP and inflation rate • Use the following table to answer questions 1-3. • Suppose that in the small economy of X-land there were 4 goods • in the years 2006-2008. The details are contained in the following table: • Use the table to answer : 1. What’s the CPI for X-land in the year 2007? 2. What’s the GDP deflator for X-land for the year 2008? • 3. What’s the inflation rate in X-land for the year 2008 (using the CPI)?

  9. 1. What’s the CPI for X-land in the year 2007? Consumer price index 2007= (price of basket of goods and services in current year/price of basket of goods and services in base year)x100 = (1x2+3x2+3x3+2x2)/(1x1+3x2+3x3+2x1)x100=21/18x100=116,6 2. What’s the GDP deflator for X-land for the year 2008? Nominal GDP= Q2008xPrice2008=70 Real GDP=Q2008xPrice2006= 5+12+21+7=45 GDP deflator=70/45x100= 155,5 3. What’s the inflation rate in X-land for the year 2008 (using the CPI)? Inflation rate= (PI in year2 - CPI in year1)/ CPI in year1x100 CPI in 2008= (price of basket of goods and services in 2008/price of basket of goods and services in the base year)x100 =(2+9+12+4)/(1+6+9+2)x100=27/18x100=150 CPI in 2007= 116,6 Inflation rate=(150-116,6)/116,6=28,6

  10. Measuring Unemployment Use the table to answer : How many people were employed in X-land in 2012? How many people were unemployed in X-land in 2012? What was X-land’s labor-force participation rate in 2012? What was X-land’s unemployment rate in 2012?

  11. 1. Refer to Table, How many people were employed in X-land in 2012? • People with jobs are employed. • 4000+1200+600=5.800 • 2. Refer to Table 1. How many people were unemployed in X-land in 2012? • People who are looking for jobs, and available for work are unemployed. • 200+1000= 1200 • 3. Refer to Table 1. What was X-land’s labor-force participation rate in 2012? • labor force participation rate = labor force/population • Labor force = employed+unemployed =5800+1200=7000 • labor force participation rate = 7000/14000x100=50% • 4. Refer to Table 1.What was X-land’s unemployment rate in 2012? • unemployment rate = unemployed/(employed+unemployed) • unemployment rate =1200/7000x100=17,1%

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