Unit 1 – BU204 – MACROECONOMICS
Unit 1 Assignment Template: The Big Picture, Tracking the Macroeconomy
Name: ______________
Course Number and Section: BU204 – Section ____
Date: ______________
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1. Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format: Course number_section number_Last name_First name_Unit number.
2. At the top of the template, insert the appropriate information: Your Name, Course Number and Section (BU204 – Section 0x), and the Date.
3.
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your answers below each question, or in the appropriate space provided for in the question. Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.
4. Your answers should follow APA format by being in double-spaced paragraph format, with citations to your sources and, at the bottom of your last page, a list of references. You must provide at least ONE reference. If you have no other references, then use the textbook as your reference. Your answers should also be in Standard English with correct spelling, punctuation, grammar, and style (Times New Roman, 12-point, black font).
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Assignment
This assignment deals with how economists measure various nations’ economies using measures such as Gross Domestic Product (GDP). In doing so, it highlights the various components of the GDP, the difference between nominal and real GDP, as well as the limitations of the GDP as a measure of national income.
1) U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell you, and what does it not tell you, about the well-being of U.S. residents? What are the limitations of the GDP as a measure of economic well-being? Given the limitations, why is GDP usually regarded as the best single measure of a society’s economic well-being?
(Enter response here)
2) What is an intermediate good? How does an intermediate good differ from a final good? Explain why is it the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.
(Enter response here)
3) GDP is defined as the market value of all final goods and services produced within a country in a given period of time. In spite of this definition, some production is left out of GDP. Explain why some final goods and services are not included.
(Enter response here)
4) The table below contains hypothetical data for country A for the year 2010.
|
Country A’s Goods and Services |
Total |
|
Household purchases of durable goods |
$1293 |
|
Household purchases of nondurable goods |
$1717 |
|
Household purchases of services |
$301 |
|
Household purchases of new housing |
$704 |
|
Purchases of capital equipment |
$310 |
|
Inventory changes |
$374 |
|
Purchases of new structures |
$611 |
|
Depreciation |
$117 |
|
Salaries of government workers |
$1422 |
|
Government expenditures on public works |
$553 |
|
Transfer payments |
$777 |
|
Foreign purchases of domestically produced goods |
$88 |
|
Domestic purchases of foreign goods |
$120 |
Refer to the Table above to answer the following questions.
a. What was country A’s GDP in 2010?
(Enter response here)
b. What was country A’s consumption in 2010?
(Enter response here)
c. What was country A’s investment in 2010?
(Enter response here)
d. What were country A’s government purchases in 2010?
(Enter response here)
e. What were country A’s exports and imports in 2010? What was the net export in 2010?
(Enter response here)
5) Calculate how much each of the following items is worth in terms of today’s dollars using 180 as the price index for today.
a. In 1925, the CPI was 18 and the price of a movie ticket was $0.30.
(Enter response here)
b. In 1930, the CPI was 14 and a cook earned $20 a week.
(Enter response here)
c. In 1940, the CPI was 16 and a gallon of gas cost $0.20.
(Enter response here)
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References:
Directions for Submitting Your Assignment
Before you submit your assignment, you should save your work on your computer in a location and with a name that is specified in item 1 of the General Instructions for all assignments. When you are ready, you may submit to the Unit 1 Assignment Dropbox.
