2020e1-practice - 10128 10487 11004 Real GDP Year 1999 2000...

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Economics 2020 Practice Problems for Exam I Short answer: 1. Define GDP. What are the pluses and minuses of using GDP as a measure of economic (and even social) well-being? 2. What types of items are included when calculating the CPI? What are the drawbacks of trying to measure the cost of living with the CPI? 3. Define a "public good" and give an example of one; also give an example of an ordinary private good, contrasting the important differences. 4. Briefly describe both Julian Simon’s and Thomas Malthus’ view on population growth. 5. Why might Sri Lanka’s recent income growth be greater than Canada’s? 6. The following is information on US GDP in billions of dollars. Nominal GDP Year 1999 2000 2001 2002 2003 Gross domestic product 9268.4 9817
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Unformatted text preview: 10128 10487 11004 Real GDP Year 1999 2000 2001 2002 2003 Gross domestic product 9470.3 9817 9890.7 10074.8 10381.3 a. According to the tables, what year is the base year? How do you know? b. Calculate the GDP deflators for 2002 and 2003. Make sure to show your formula. Longer problems (SHOW WORK OR YOU WILL LOSE POINTS!!!!!!) : 1. You consume only 2 goods (milk and cereal), and in 2003 you buy 40 gallons of milk and 30 boxes of cereal at $3/gallon and $2.50/box respectively. In 2004 you buy the same amount of milk but eat more cereal (32 boxes), and the goods cost $3.25 and $2.60 respectively. Develop your own GDP deflator style price index using 2003 as the base year. What was inflation from 2003 to 2004?...
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