TA1_Groups-EVEN - JAN-ZB-ZOO 15:17 P.01/02 Carleton...

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Unformatted text preview: JAN-ZB-ZOO'? 15:17 P.01/02 Carleton University DOWN“! officonomics Tutorial Assignment 1. 7 Groups 2, 4. 6 . 8, 10, 12. MEL—Wm 900% 1- SPDPOSB that the economy is characterized by the following information, with values in billions of dollars: .- Year Nominal GDP Real GDP “ . ,. $50.0 , . $500 m- $600 ' ' - $545 me:- $720 ‘ - $600 a. What is the GDP deflator for the three years? ' Mg' b. Which is growing faster. nominal or real GDP? C. 2.a. Define the nominal interest rate and indicate how it differs from therreal interest rate. . . b If you lend'Isc’meO"? $1000 for 009 year at a nominal interest rate of 11 % how'rnuch interest income do YOU receive?_=c ; - c. If inflation is 5% per year, what is the real interest rate in(b)?r d. If the inflation rate is 20%. what is the real interest rate in (b)? What has happened to the lender? . , .1: . —-——— —3-_— “mm—— a. Which country is richest? Do you think that the richest country has the highest level of overall well-being? Real GDP er erson in 2000 b. How much does GDP increase in each country from 2000 to 2001? c. Which country is growing most rapidly? d. How many years does it take for GDP to double in each country? e. if country A stopped growing in 2000, how many years would it take the other three countries to catch up to A? - JAN—2:3—2007 15:17 P.02/02 4. Suppose that people consume only three goods, as shown in this table: Tennis Balls . 1 Tennis Raguets Gatorade 1998 price $2 . . $40 $1 .. 1998 quantity 100 - 10 2011” 1999 price if: . $2 .560 .. : $2 .E . _ 1999 quantity 100 ' 10 200 Fiiz' \"'|" 55 " '-‘~ _ .'-' 3 a. _ What is the percentage change in the price of each of the three goods?fi_What is the percentage change in theoverall price level? -- 1- b. .. I‘Do tennis racquets become more 0} less expensive relative to Gatorade?" Does . Explain. ‘ . . - _|\&'L"'1l the well-being of some peoplelchange relative to the well~being of_ others? 5. ‘ From 19483-1998 the consumer price index. in Canada rose 682 petéent. Use..this V ”a" fact to adjust each of the"following 1948 prices for'the; effects of inflation. .Which items .p-r .'-'" 1.2 I: ITEM . , 1948 PRICE: ' The Globe and Mail ' ' $0.05 ' i'.1:_'.=- r‘Bus fare for Oflawa—Tbifihtdfeturn‘ ; I" ,. $10.65 ; 1kgonions -- _ . $0.22 1kg peanut butter W _ 9.9+ $0.77 I. 1kg pork shoulder) " _ $0.86 . = all Eli/oops‘WQlLtkfi ,l’DA a cost less in 1998 thanxin 1948 after adjusting for infleflonjz..Which items. cost more?‘ . 1998, PRICE * $0.57 ”_‘.'$104.36‘ ‘ g 91.52 1 - $5.99 ' $2.13 If!" @ 'ToTAL P.02 ...
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