ProblemSet1 - e f Monica makes her own pasta sauce in her apartment Cars produced by General Motors in Mexico 4 Consider the following data for a

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N a m e : S e c t i o n : T . A . N a m e 180.101 ELEMENTS OF MACROECONOMICS Fall, 2007 Problem Set #1 Prof. Louis J. Maccini INSTRUCTIONS: Above, write your name, section number and T. A. name. Answer each question in the space provided, or on the back of the same sheet. 1. “Nominal GDP includes the current value of services produced in the economy.” True, False, Uncertain. Explain. 2. Compare and contrast the Consumer Price Index with the Implicit Price Deflator for GDP as a measure of the over-all price level for the economy.
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3. Which of the following items are included in GDP? For those items not included, explain why they are not included in GDP. a. Jane buys newly issued shares of stock in Macro.com, Inc. b. Ross buys a new pair of jeans at a local department store. c. Joey has his mustache trimmed at his hair salon. d. Rachel buys an antique chest at a resale shop.
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Unformatted text preview: e. f. Monica makes her own pasta sauce in her apartment. Cars produced by General Motors in Mexico 4. Consider the following data for a closed economy (that is, one without exports or imports): Consumption Expenditures 500 Wages and Salaries 600 Government Expenditures 300 Personal Taxes 300 Profits 250 Interest 100 R e n t ? Investment Expenditures 375 Compute Gross National Product according to both the expenditure and income approaches. Show your work. 5. Consider an economy that produces only rice. In 2000, the price of rice was $5 per pound and 1500 pounds were produced, giving the economy a nominal GDP of $7500. In 2001, the price of rice rose to $8 per pound and nominal GDP was calculated at $11,000. What was real GDP in 2001? Did real GDP rise or fall? Explain carefully....
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This note was uploaded on 09/21/2010 for the course ECON 180.101 taught by Professor Maccini during the Fall '08 term at Johns Hopkins.

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ProblemSet1 - e f Monica makes her own pasta sauce in her apartment Cars produced by General Motors in Mexico 4 Consider the following data for a

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