Find the growth rate for the economy

Reference no: EM131918658

Measuring economic activity

1. Find nominal and real GDP for the following economy that produces 2 goods: beef and chicken. Use Year 1 as the base year.

	Quantity of beef	Price of beef	Quantity of chicken	Price of chicken
Year 1	50	$20	100	$15
Year 2	70	$25	150	$25
Year 3	90	$30	200	$40

Year 1 nominal GDP ________
Year 2 nominal GDP _________
Year 3 nominal GDP ___________
Year 1 real GDP _______
Year 2 real GDP ________
Year 3 real GDP ________

Also, find the growth rate for the economy between Year 1 and Year 2. Then, between Year 2 and Year 3.

Growth rate (year 1 to year 2) _______________

Growth rate (year 2 to year 3) _______________

Measuring inflation

2. Compute the inflation rate using the CPIfor the following example:

Fixed basket of goods
Oranges 10
Lemons 15
Limes 25

	Year 1	Year 2	Year 3
Oranges	$3	$3.30	$4
Lemons	$2	$2.50	$3.60
Limes	$1.50	$3.50	$5

a) Find the values for the CPI price indexes (useyear 1 as the base year)

Year 1 _____________

Year 2 _____________

Year 3 _____________

(b) Compute the inflation rates:

Year 1 to 2 ___________

Year 2 to 3 ____________

Saving and investment

3. Using the following information find (a) national saving, (b) private saving, and (c) public saving. (d) Also, find the value for investment spending done by firms. (e) Does this economy have a budget surplus?
Consumption = 500
Taxes-transfers = 150
Government spending = 300
Y = 1200

Loanable funds model

4. Use the loanable funds model to analyze the impact of a wave of optimism spreading over the business community.

Reference no: EM131918658

Questions Cloud

Brightness in different depths of field : Suppose you want to create two photographs with the same brightness in different depths of field.

Comparisons between the us court system and the saudi arabia : Write a 7 page paper that compares and contrasts the different courts you observed and summarize your overall learning experience.

Discuss the formation of urine explaining the microscopic : Discuss the formation of urine explaining the microscopic anatomy of the nephron and its basic functions of filtration, reabsorption, and secretion.

Company ethical guidelines : As an HR professional how do you address an employee who does not follow the company's ethical guidelines?

Find the growth rate for the economy : Use the loanable funds model to analyze the impact of a wave of optimism spreading over the business community - Find the values for the CPI price indexes

Npv is negative and irr is less than the wacc : You should recommend that the project be rejected because its NPV is negative and its IRR is less than the WACC.

Budget considerations by labor and management : Analyze the impact these topics can have on the administration of the law enforcement organization.

How can stretch assignments help managers develop : How can stretch assignments help managers develop? What type of job experiences might be considered "stretch assignments"?

Director of hr for a government contractor : You just started your new job as the Director of HR for a government contractor. After being there for a few weeks, you notice that employees

User Account

All Pages