Principles of Macroeconomics - Principles of Macroeconomics...

Principles of Macroeconomics
Spring 2016
Assignment # 1
Maria Averianova
Due Date: February 23, 2016
Task 1
The information in the table gives the price level and nominal GDP values for ten
years. Use this information to answer the questions below.
Year Price Level Year to Year
Inflation Rate
(%)
Nominal GDP
($ billions in
current year
prices)
Real GDP ($
billions in 1976
prices)
1976 100 198 198
1977 106.4 6.4 218 204.9
1978 112.6 5.8 242 214.9
1979 123.9 10.0 276 222.8
1980 137.2 10.7 310 225.9
1981 152.1 10.9 356 234.1
1982 165.2 8.6 374 226.4
1983 173.5 5.0 406 234.0
1984 178.9 3.1 445 248.7
1985 183.5 2.6 478 260.5
a. Fill in the table above.
b. Explain the difference between inflation, deflation and disinflation.
c. Did this economy experience a recession based on the time path either of
nominal or real GDP?

Task 2
Consider the following table of information
a. Calculate GDP via expenditure approach.
b. Calculate GDP via income approach.