HW 1.013 - ECON 304 SECTION 013 INTERMEDIATE MACROECONOMIC...

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ECON 304, SECTION 013 INTERMEDIATE MACROECONOMIC POLICY HOMEWORK 1 (CHAPTER 2) PROBLEMS DUE: WEDNESDAY, SEPTEMBER 9, 2009 1. Is the value of intermediate goods and services produced during the year included in GDP? For example, are computer chips produced and installed on a new PC included in GDP? Note that the question does not ask whether the computer chips are directly counted in GDP but rather whether or not their production is included in GDP. 2. An economy produces three goods: cars, computers, and oranges. Production units and prices per unit for years 1998 and 1999 are as follows: 1998 1999 Quantity Price Quantity Price Cars 10 $2000 12 $3000 Computers 4 $1000 6 $500 Oranges 1000 $1 1000 $1 a) What is nominal GDP in 1998 and in 1999? (b) Using 1999 as the base year (i.e., using 1999 prices), what is real GDP in 1998 and 1999? By what percentage does real GDP increase from 1998 to 1999? (c)
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This note was uploaded on 01/27/2010 for the course ECON 342 taught by Professor Mcleod during the Spring '09 term at Penn State.

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HW 1.013 - ECON 304 SECTION 013 INTERMEDIATE MACROECONOMIC...

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