User Account

All Pages

Calculate the level of output for ten years

Assignment Help Microeconomics
Reference no: EM131025277

Homework #1

1. For this question assume that this economy produces only three kinds of goods: bikes, refrigerators, and chairs. The table below provides data on the sales and prices for these three goods for three different years.

Year

Number of Bikes Sold

Price per Bike

Number of Refrigerators Sold

Price per refrigerator

Number of Chairs Sold

Price per Chair

1980

1000

$100

1050

$600

150

$70

1990

1500

$200

1500

$400

400

$50

2000

2000

$350

5000

$200

250

$80

a. Using an Excel spreadsheet complete the following table:

Year

Nominal GDP

Real GDP using 1980 as the Base Year

Real GDP using 2000 as the Base Year

1980

 

 

 

1990

 

 

 

2000

 

 

 

b. Calculate the GDP deflator using first 1980 as the base year and then 2000 as the base year. Collect your findings in the following table.

Year

GDP deflator using 1980 as the base year

GDP deflator using 2000 as the base year

1980

 

 

1990

 

 

2000

 

 

c. From the data you gathered in part (a), complete the following table. Hint: you may find it convenient to do this using Excel as well.

Period

Percentage Change in Nominal GDP

Percentage Change in Real GDP Using 1980 as the Base Year

Percentage Change in Real GDP Using 2000 as the Base Year

1980-1990

 

 

 

1990-2000

 

 

 

d. Examine your answers to part (c). Does it matter whether you use 1980 or 2000 as the base year when you compute the percentage change in real GDP? Provide an explanation to support your findings.

2. Use the date provided in question (1) to answer this question. Suppose the CPI is calculated using a market basket composed of 100 bikes, 200 refrigerators, and 40 chairs.

a. Calculate the CPI three times: the CPI with the base year 1980; the CPI with the base year 1990; and the CPI with the base year 2000. Enter your calculations in the following table. Hint: once again you might find it fun to do this with Excel.

Year

CPI with Base Year 1980

CPI with Base Year 1990

CPI with Base Year 2000

1980

 

 

 

1990

 

 

 

2000

 

 

 

b. Now, calculate the rate of inflation between 1980 and 1990 and between 1990 and 2000 using the different base years. Summarize your findings in the following table.

Period

Rate of Inflation with Base Year 1980

Rate of Inflation with Base Year 1990

Rate of Inflation with Base Year 2000

1980-1990

 

 

 

1990-2000

 

 

 

3. You are given the following data.

Year

Nominal GDP (PY)

P

Real GDP (Y)

1990

100

2

50

1992

110

2.25

48.89

1994

120

2.5

48.00

1996

125

2.6

48.08

1998

130

2.5

52.00

a. Fill in the following table. Note: you will find this very easy and quick if you use Excel.

Period

Percentage Change in Nominal GDP

Percentage Change in the Price Level

Percentage Change in Real GDP

Sum of Percentage Change in the Price Level plus the Percentage Change in Real GDP

1990-1992

 

 

 

 

1992-1994

 

 

 

 

1994-1996

 

 

 

 

1996-1998

 

 

 

 

b. Inspect your findings. Is there a relationship between the column titled "Percentage Change in Nominal GDP" and the column titled "Sum of Percentage Change in the Price Level plus the Percentage Change in Real GDP"? Describe this relationship.

4. Suppose output grows at 10% a year while labor grows at 4% a year. Suppose that output initially equals 100 units (measured as $100) and labor is initially 20 units.

a. Using Excel calculate the level of output for ten years and the level of labor for 10 years. Then using this data, calculate labor productivity. Put this information in the following table.

Year

Output

Labor (measured as units of labor)

Labor Productivity (measured as $/unit of labor)

Annual Growth Rate of Labor Productivity (measured as a percent)

1

 

 

 

 

2

 

 

 

 

3

 

 

 

 

4

 

 

 

 

5

 

 

 

 

6

 

 

 

 

7

 

 

 

 

8

 

 

 

 

9

 

 

 

 

10

 

 

 

 

b. Examine your findings from part (a): although you calculated the annual growth rate of labor productivity in part (a), was there an alternative way you could have arrived at an approximation of your answer?

Reference no: EM131025277

Questions Cloud

Calculate the standard matrix for linear transformation : T: R^3 -> R^3 given by rotating -pi/2 counterclockwise about the x_1-axis (as viewed from the positive side) and then rotating pi/2 about the x_3-axis.
The internet architecture model : Explain how the OSI/Rm layers equate to the Internet architecture model layers.How does cloud computing benefit mobile devices?
Draw t-accounts for wisconsin bank : Draw T-accounts for Wisconsin Bank, and Madison Credit Union depicting the changes in assets and liabilities for these two institutions
What state expect to find methane in on surface of titan : On moving upward through the atmosphere the pressure will decrease. If we assume that the temperature does not change what phase change would you expect to see as we move away from the surface?
Calculate the level of output for ten years : Calculate the CPI three times: the CPI with the base year 1980; the CPI with the base year 1990; and the CPI with the base year 2000 -  calculate the rate of inflation between 1980 and 1990 and between 1990 and 2000 using the different base years.
What is opinion of stage gate new product development system : What is your opinion of the Stage Gate New Product Development System? What is your explanation in support of your opinion?
Create a function that reads the contents of a file : C PROGRAMMING:how would I create a function that reads the contents of a file and inputs the contents into the main program...for example:
What advice do you give the store managers : What's going on in the stores? What advice do you give the store managers about local newspaper advertising? Is it worth it to advertise? In what stores?
What is company xs residual income : What is Company X's residual income? (Ignore Tax)

Reviews

Write a Review

 

Microeconomics Questions & Answers

  A monopolist has two types of customers there are 100 of

a monopolist has two types of customers. there are 100 of type a who will each pay up tp 10 for a single unit of the

  Unemployment short term or long term

Most spells of unemployment are short, and most unemployment observed at any given time is long term. How can this be?

  Consider a homogeneous product industry with inverse market

consider a homogeneous product industry with inverse market demand given by p 1100 - 2qnbsp there is currently one

  Explain the process of revenue at nsu

Explain the process of revenue at NSU, focusing on the relationship between the increased revenue from students enrolling at NSU

  Explain how the sherman antitrust act

Explain how the Sherman Antitrust Act

  Write an equation that represents capriland ppf

Given the above information, write an equation that represents Capriland's PPF. In your equation pianos should be abbreviated as P and cars should be abbreviated as C

  All homeowners regardless of income or the value of the

claim the mortgage interest tax deduction is a regressive policy. a simpler better policy that could achieve the same

  Wear ever tires have a track record of lasting

Wear ever tires have a track record of lasting 56,000 miles on average, with a standard deviation of 8,000 miles, and a normal distribution. What is the chance that a given tire wills last 50,000 miles?

  If increasing returns to scale exist

If increasing returns to scale exist, then an increase in all inputs of five percent should:

  Company faces a number of different fixed and variable costs

Everything looks like a Nail Inc. is a manufacturing company that produces hammers. The company faces a number of different fixed and variable costs.

  Is growth desirable and sustainable

Are Workers in Developing Countries Exploited by Multi-National Corporations - Accounting for Growth and Labor and Productivity

  Explain how rent seeking can lead to a drop in production

explain how rent seeking can lead to a drop in production of goods and services. what role might the underground economy play in lessing the drop in productie activities.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd