Anda di halaman 1dari 2

Answers Macroeconomics

Gross domestic product (GDP) and living standard

01 Gross domestic product 1

no (no exchange)
yes (exchange; consumption)
yes (exchange; consumption or government purchases)
no (no exchange)
yes (exchange; investment)

02 Gross domestic product 2


GDP can be calculated by 3 methods:
Output method by calculating the value of produced goods and services
Income method by calculation the value of factor earnings
Expenditure method by calculating the value of spending on goods and services

03 Gross domestic product 3


GDP = C + I + G + (X - M) = 310 + 115 + 60 + (305 - 245) = 545

04 Gross domestic product 4


(I - S) + (G - T) + (X - M) = 0
(I - S) = Investment - saving surplus or deficit private sector
(G - T) = Government purchases - taxes surplus or deficit government sector
(X - M) = Exports - imports (international) trade surplus or trade deficit
If G > T and I > S, then (X - M) < 0, that is, the twin deficits (government/private)
must be borne by the (international) trade deficit (M > X).

05 Gross domestic product 5


X
(I - S) + (G - T) + (X - M) = 0
(40 - 30) + (60 - 80) + (X - 150) = 0
10 - 20 + X - 150 = 0
X = 160
GDP = C + I + G + (X - M) = 240 + 40 + 60 + (160 - 150) = 350

06 Value added
Value added = 230 - 60 = 170
Pollution is an externality and not added.

07 Investment
I = 65 + 50 - 5 = 110
AMACR1.DOC

Page 1 (of 2) 1 GDP and living standard

08/06/2016

08 Consumption 1
C = 100 + 0.85 Yd
Components of the consumption function:
100
Autonomous consumption which is independent of income
0.85
MPC = Marginal propensity to consume
Yd
Disposable income (income after tax)
C = 100 + 0.85*1400 = 1290
1600 = 100 + 0.85*Yd
0.85Yd = 1500
Yd = 1765

09 Consumption 2
Price level
Aggregate supply
P2
Aggregate
demand 2

P1

Aggregate demand 1
GDP
Full employment

Price level rises, GDP does not change because of full employment.

10 Living standard
No, real GDP is not a good indicator. Arguments:

Illegal transactions, household activities and do-it-yourself activities are not


included.

The health system, the education system, life expectancy, the environment etc.
are not taken into consideration.

Back to questions. Click here!

AMACR1.DOC

Page 2 (of 2) 1 GDP and living standard

08/06/2016

Anda mungkin juga menyukai