Macro tut 4 Class Problems

# Macro tut 4 Class Problems - Business Macroeconomics...

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Business Macroeconomics, Tutorial 4 MP: M, Ch 9 th ed. Chapters 4-5 , CFO: POM, 9 th edition Chapter 4 . Tutorial 4: Measuring GDP and Economic Growth Class Problems and Applications: 1. Figure 4.1 above shows the flows of expenditure and income in the United States. During the second quarter of 2007, B was \$9,658 billion, C was \$2,147 billion, D was \$2,656 billion, and E was - \$723 billion. Name the flows and the calculate Flow A is aggregate income; Flow B is consumption expenditure; Flow C is government expenditure; Flow D is investment; Flow E is net exports. a. Aggregate expenditure. b. Aggregate income. c. GDP. 2. The table shows data from the United Kingdom in 2005. a. Calculate GDP in the United Kingdom. b. Explain the approach (expenditure or income) that you used to calculate GDP. 3. Tropical Republic produces only bananas and coconuts. The base year is 2008, and the tables give the quantities produced and the prices. a. Calculate Tropical Republic’s nominal GDP in 2008 and 2009. Item Billions of pounds Wages paid to labor 685 Consumption expenditure 791 Taxes 394 Transfer payments 267 Profits 273 Investment 209 Government expenditure 267 Exports 322 Saving 38 Imports 366 Quantities 2008 2009 Bananas 800 bunches 900 bunches Coconuts 400 bunches 500 bunches Prices Bananas \$2 a bunch \$4 a bunch Coconuts \$10 a bunch \$5 a bunch 1

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Business Macroeconomics, Tutorial 4 MP: M, Ch 9 th ed. Chapters 4-5 , CFO: POM, 9 th edition Chapter 4 . b. Calculate real GDP in 2009 in terms of the base-year prices. 4. Toyota to Shift U.S. Manufacturing Efforts Toyota Motor Corp. will start producing the hybrid Prius in the U.S. for the first time as the Japanese automaker adjusts its U.S. manufacturing operations to meet customer demands for smaller, more fuel-efficient vehicles. The company said Thursday it will start producing the Prius in 2010 at a
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## This note was uploaded on 06/07/2011 for the course ECON 3 taught by Professor Dd during the Spring '11 term at Alvin CC.

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Macro tut 4 Class Problems - Business Macroeconomics...

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