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Real vs Nominal GDP: Sample Calculations With Explanations

Given a table of data comprising real GDP and its components over a number of years, compute compound annual percentage changes in real GDP (economic growth) and compute the shares in real GDP. Evaluate changes in economic growth. See the attached file. Complete the table and answer the following questions: What's the differ

Nominal GDP and real GDP.

Why is it important for a country to calculate their GDP and release this information to the public? Would it matter if they only reported nominal GDP and not real GDP? The calculation of GDP does not include everything, such as non-market and illegal activities; explain the relative importance of this for a country.

FED's Actions in Stopping Inflation

The Economics in Practice describes the increase in food prices around the world in 2008. Since food, in large measure, affects the real income of households, increasing prices will eventually push up wages and have an impact on the aggregate supply curve. Central banks were very worried about the prospects for inflation becomin


1.Explain the various types of inflation and its consequences. 2.Describe the difference between inflationary gap and deflationary gap.

How the Fed uses the Money Multiplier to fight inflation

Why do you think the Fed evaluates the money multiplier when making decisions with regard to the money supply? What function does the money supply serve in our economy to influence certain economic variables? Why does the Fed like to fight inflation in our economy and is inflation a concern right now given our current economic s

Sustainable primary surplus/deficit

A.Calculate the sustainable primary surplus/deficit for each country and identify which countries (if any) have a potential debt crisis on their hands. b. For any countries with an unsustainable debt path identify possible changes that could bring the country back to sustainability. Country debt/gdp Primary balance N

Gross Domestic Product

GDP is a less than perfect measure of economic well-being. It may be faulted for each of these practices EXCEPT that it: does not take leisure time into account. involves multiple counting. does not take psychic costs into account. does not take psychic income into account. Net dome

Measuring Inflation

In the United States of Albion, expected inflation is 5% and the real interest rate is 2%. (a) What is the nominal interest rate? (b) If inflation turns out to be 10% instead, what is the ex post real interest rate? Who gains and who loses from this error in forecasting inflation? (c) Recalculate your answers for (a) and (

Nominal vs. Real GDP

Consumer Price Index (pound of corn) Year Current Price Base Year Price Price Index 2006 $1.00 $1.00 100 2007 $1.25 A 125 2008 $1.34

Economic Princples

Please explain in detail to improve my understanding of these questions. 23-4 Why is there a trade off between the amount of consumption that they can enjoy today and the amount of consumption that they can enjoy in the future? Why cant people enjoy more of both? How does saving relate to investment and thuus to economic g

Calculating and Assessing Inflation Rates

Please help me with the following problems. 1. Complete the table (see attached) by filling in the banks. 2. Which Decade has the most inflation? 3. How much did consumer prices change during the Great Depression from 1930 to 1940. 4. In 1925, the cost of a Model T Ford was $290. What is the equivalent cost at 2008 pric

Economy Exercises: Consumer Price Index

Hello, I need help answering the following exercises. 1. A company dedicated to tabaco has a cost and revenue function of: CT= 20 + Q + Q2 (q squared) I= 15Q - Q2 (q squared) Determine the maximum and minimum amounts that can be produced where there is neither loss or gain. 2. If the consumer price index in 2002 i

Government intervention in conditions like inflation

Based on the "10 Principles of Economics" please help to answer the following questions. 1. Under what conditions might government intervention in a market economy improve the economyâ??s performance? Give at least two examples. 2. Explain how an attempt by the government to lower inflation could cause unemployment to in

Ramifications of unemployment

Some people believe that 0% unemployment, where everyone who wants a job, has a job and 0% inflation, where prices remain the same year after year, are ideal policy targets for the U.S. economy. Would you recommend a policy target of 0% unemployment and 0% inflation? What implications would these policies have on the economy a

Assignment on monetary policy

The Federal Open Market Committee (FOMC) of the Federal Reserve Board meets every six weeks to set monetary policy in the United States. Immediately after the meeting, the FOMC issues a â??statementâ? that consists of a few paragraphs summarizing its position. Then, three weeks later, the FOMC releases the â??minutesâ?

How are unemployment and inflation related?

What is the historical relationship between unemployment and inflation? Using data for the year 2010, what are the most current figures for the unemployment rate and the inflation rate? What does this say about the economy today?

Low inflation, expanding ecnomy, and high unemployment rates

1. How it is possible for a country to have low inflation, high unemployment rates, and an expanding economy all at the same time. What causes this to happen and as a portfolio manager, what trading strategies could you implement to protect your interest and why you would or would not expect to make a profit. Use graphs and ot


Prepare a two- to three-page analysis by answering the questions below. Be sure to cite your references using APA format. What is nominal GDP? What is real GDP? What is included in each? Why are these measures important? What do they tell us? What was GDP for the last two years? Use the data at the following Web site to ans

Price Index and Inflation

Consider the attached table for the economy of a nation whose economy produces five goods. Assume that 2007 is the base year. A) Compute Nominal GDP for 2006, 2007, and 2008? Show ALL work. B) What is Real GDP for 2006, 2007, and 2008? Show ALL work. C) What is the Price Index for 2006, 2007, and 2008? Show ALL work.

Increasing the Money Supply: Appreciation/Depreciation

As an economist, you know that when a country depreciates its currency, initially its competitiveness in the world markets increases. You also know that currency appreciation improves the prospects of foreign investments which will likely increase GDP. The head of state has turned to you for your wise council. Why would you be

Measures of economic activity

- Provide an explanation of GDP, unemployment, and inflation as measures of economic activity. Cite recent examples and issues in each area to support your demonstration of understanding. -Discuss the extent to which you believe these three measures are related, whether or not it is best to discuss each separately, and why yo

7 financial homework questions

Attached is a document with 7 finance questions. What is an opportunity cost? How is this concept used in TVM analysis, and where is it shown on a time line? Is a single number used in all situations? Explain. Explain whether the following statement is true or false: $100 a year for 10 years is an annuity; but $100 in Yea

American Recovery and Reinvestment Act

A.Under the American Recovery and Reinvestment Act of 2009, the federal government is undertaking a large fiscal stimulus, about $800 billion, or more than 5% of GDP, to be spent over the next several years. Using the AS/AD framework, explain the rationale and likely effect of this fiscal stimulus program. How large an effe

Propose a strategy to bring the economy out of recession

Suppose that you are the chief economic advisor to the president of the U.S. You are asked to propose a strategy to bring the economy out of recession. Your goal is to avoid inflation and yet bring the economy to full employment as rapidly as possible. What will be your main strategy? Why? Use examples and give reasons to suppor