Module 2 Case Assignment

Dr. Herbert Weinraub

GDP:

Questions:

1. Assume that consumer spending is $1,000, government expenditures are $300, investments by industry are $150, and the excess of exports over imports is $200. Compute the GDP. (Please show your work) The basic formula for calculating the GDP is: Y = C + I + E + G C=1000; I=150; E=200 and G=300

Y=1000+150+200+300=1650, Y=1650

2. If we are able to increase our domestic energy production, and that allows us to import less oil from foreign countries, briefly explain what will happen to the GDP. If Exports exceeds imports then it will add to the GDP but if imports are more than the exports it subtracts from the GDP. With this being said if we import less oil from foreign countries then it would positively impact the nation’s GDP. Inflation

Questions:

1. If the CPI went from 100 to 104 during the past year, the rate of inflation, in percent, was? (Please show your work)

Rate of inflation = (104 – 100)/100 x 100

= 4/100 x 100 = 4%

2. If the CPI went from 231 to 234 over the past year, the rate of inflation was? (Please show your work) Rate of inflation = (234 – 231)/231 x 100, = 3/231 x 100, = 1.30% Unemployment rate

Questions:

1. Assume the entire civilian labor force is 20,000 people and the number of unemployed is 2,000 people. Compute the unemployment rate, in percent. (Please show your work) Unemployment Rate= 2000/20000 = 0.1 *100 = 10

Unemployment Rate=10%

2. Assume the entire civilian labor force is 20,000 people, the number of unemployed is 2,000 people but, 500 of the unemployed have now stopped looking for work. Compute the unemployment rate, in percent. (Please show your work) Unemployment Rate=1500/19500= 0.078

Unemployment Rate= 7.8%

International Economic Trends

1. Compare the four countries in terms of Output and Growth (Real GDP). The analysis should only cover the period from the beginning of 2008 to the present, and make sure the most...

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