I want to answer 4 problem in Intermediate MacroeconomicsI will upload DOC

I want to answer 4 problem in Intermediate MacroeconomicsI will upload DOC


Econ 346 Homework 1:
1) Consider the following economy with only three goods:
Year
2010
2011
Q milk
5000
6000
Q apples
3000
4000
Q computers
500
600
P milk
1
1.2
P apples
0.9
0.8
P computers
300
400
a) Assume that the three goods are produced and consumed within the domestic economy and
calculate the nominal GDP and the real GDP using 2010 as the base year for both periods.
b) What is the inflation rate in 2011 as measured by the GDP deflator?
c) Calculate the inflation rate in 2011 based on a consumer basket which is given by the quantities
consumed in 2010.
d) How do your answers to parts b and c change if computers are not produced within the
domestic economy but imported?
e) How do your answers to parts b and c change if computers are not sold within the domestic
economy but only exported?
2) Consider for following economy containing only 2 goods:
Cars
Quantity
Price
2010
10
2000
2011
12
3000
2012
10
4000
Quantity
4
6
8
Computers
Price
1000
500
500
a) Calculate nominal and real GDP for this economy (use 2010 as the base year.) Interpret the
change in nominal GDP and in real GDP over time. Are the impacts of prices or quantities
greater on nominal GDP?
b) Calculate the inflation rate between 2010 and 2011 and between 2011 and 2012 using the GDP
deflator.
c) Consider now a consumer basket consisting of the quantities consumed in 2010. Calculate the
inflation rate between 2010 and 2011 and between 2011 and 2012 using the CPI.
d) Why do your results in parts b and c differ? Explain the difference between a Paasche and a
Laspeyres index.
3) An economy has three firms operating with the following costs and outputs:
Firm A
Imports of
intermediate goods
Wages
Dividends
Costs
100
600
200
Sale of final goods
Exports
Output
400
500
Firm B
Imports of
intermediate goods
Wages
Dividends
Repayment of debt
Costs
100
300
200
50
Output
Sale of intermediate
400
goods
Exports
250
Firm C
Imports of
intermediate goods
Purchases of
intermediate goods
Wages
Dividends
Repayment of debt
Costs
50
400
Sale of final goods
Exports
Output
800
300
450
120
80
Assume additionally that all workers of these firms live within the economy and that the firms
are indebted to resident banks. It is also known that resident shareholders hold 75% of firm A,
50% of firm B, and 83.3% of firm C. Moreover, residents of the economy receive primary
incomes of $250 from abroad.
a)
b)
c)
d)
Calculate the GDP of this economy.
Calculate the GNP of this economy.
What happens to GDP if Firm A exports $200 at the direct expense of Firm B?
What happens to GNP if Firm A exports $200 at the direct expense of Firm B?
4) In December of 2018, labor in County Z was composed in the following manner:
Full time regulated workers over 18 years old
Part time regulated workers over 18 years old
Full time workers paid cash (not paying taxes)
Full time home caretakers (i.e. adults staying at
home with children)
Retired individuals
Students in school full time (not working for
wages)
Adults unemployed and actively seeking work
Adults unemployed who have given up searching
for work
Adults receiving disability benefits who are
unable to work
Full time regulated workers between 16-18 years
old
Part time regulated workers between 16-18 years
old
a)
b)
c)
d)
120.2 million
20.0 million
10.5 million
31.8 million
25.3 million
13.2 million
6.9 million
1.5 million
9.3 million
0.9 million
1.1 million
What is the size of the labor force?
What is the labor force participation rate?
What is the unemployment rate?
What are three disadvantages of the unemployment rate as it is measured by the BLS?

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