What is the composition of gdp by percentage
Course:- Macroeconomics
Reference No.:- EM13784788

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Macroeconomics


Part I

Assume that Country A has a population of 500,000 and only produces 1 good: cars. Country A produces 100,000 cars per year. The people in Country A purchase 90,000 cars, but there are not enough cars to fulfill all the demand. They decide to import 50,000 more. The government buys 25,000 cars for its police force, and 10,000 cars are bought by companies to transport employees to other locations to work. They also export 65,000 cars to nearby countries for sale. Discuss the following:

What is Country A's GDP?

What is the composition of GDP by percentage?

What is the GDP per capita?

How does this relate to Keynesian economics?

Part II

Go to the Bureau of Economic Analysis at this Web site, and look up the latest new release for real GDP. Address the following questions after reading the latest release:

Where is the United States in the business cycle?

What is the real GDP today?

What is the largest component of GDP?

What is the smallest component of GDP?

What is the fastest growing component of GDP, and why?

What components of GDP were involved in the change from last month to this month?

What is the price index today?

What caused the change?


Verified Expert

Preview Container content

Keynesian economics believed strongly on the demand forces while classical economists were on the view that supply creates its own demand. Keynesian economics believed in the short run specially during the time of economic recessions when the economic output strongly influenced by the aggregate demand of the economy.

According to Keynesian economics, government intervention plays a vital role to maintain the stable equilibrium in the economy. Keynesian theory advocates that market is imperfect and not self-sustaining rather government intervention is highly required to maintain the full employment equilibrium.

Keynesian economics formulated an income expenditure model where total income is comprised of consumption expenditure, investment expenditure, government expenditure and net exports The equilibrium level of GDP can be determined at the point where aggregate demand is equal to aggregate expenditure Y=AE.
Since we have applied the same concept in our above analysis, this is closely related to Keynesian economics.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Macroeconomics) Materials
Identify a product that you regularly consume, such as soft drinks or a particular snack food. Describe how your demand (consumption) will be impacted by a 25% price increas
Suzy is considering opening a restaurant. To do so, she would have to quit her current job which pays $20,000 a year and use her own car which she currently leases out to he
Suppose the government institutes a new sales tax on shoes, which are produced by a competitive constant-cost industry. a. Does the price of shoes change by more in the short
The market for toasters is a competitive market. Suppose that the quantity of toasters supplied per year depends as follows on the price of a toaster:On a piece of graph paper
You will be asked to collect five (5) newspaper articles relating to subjects we are covering in the class. As we cover the various chapters you should be actively searching
Discuss this with your group members. Is there anything that you've learned studying these models that gives you a better understanding of why the Obama administration's eco
Post a question/questions about real estate lease negotiation, drafting, administration or remedies for default (including the somewhat misunderstood "eviction" or, as it's
List the assumptions of the perfectly competitive model. Calculate the firm's total revenue (TR), total cost (TC), and profit assuming the firm produces this level of output.