1. Feeling wealthier; Spending more? Access the Bureau of Economic Analysis Web
ID: 1158154 • Letter: 1
Question
1. Feeling wealthier; Spending more? Access the Bureau of Economic Analysis Web site, www.bea.gov interactively. Select "Interactive Data Tables," which is listed under Publications. On that page, select "National Income and Product Accounts." Go to the List of All NIPA Tables and then find Table 1.1.6, which will give you access to real GDP figures for the U.S. economy. Find the annual levels of real GDP and real consumption for 2005 and 2006. Did consumption increase more rapidly or less rapidly in percentage terms than real GDP? 2. The recession of 2007-2009-Which component of AD declined the most? Use the interactive feature of the Bureau of Economic Analysis Web site, www.bea.gov, to access the National Income and Product Account Tables. Select Interactive Data Tables which is listed under Publications. On that page, select National Income and Product Accounts. Go to the List of All NIPA Tables and then find Table 1.1.6, which will give you access to real GDP figures for the U.S. economy. From Table 1.1.6 find the levels of real GDP, personal consumption expenditures (C), gross private investment (Ia), net exports (Xn), and government consumption expenditures and gross investment (G) in the first and third quarters of 2008. By what percentage did real GDP decline over this period? Which of the four broad components of aggregate demand decreased by the largest percentage amount?Explanation / Answer
1. The level of real GDP of US for the year 2005 was $14.37 trillion, while the real consumption expenditure for the same year was $9,665 billion. In the year 2006, the real GDP was $14.72 trillion and the real consumption expenditure for the same year was $9,976.5 billion. Consumption expenditure increased more rapidly than the increase in real GDP in percentage terms.
Percentage change in real consumption- 3.218% increase
Percentage change in real GDP - 2.436% increase
2. Four components of aggregate demand (AD) -
Conumption spending : The personal consumption expenditure in quarter 1 of 2008 was $10,004 billion and $10,140 in the 3rd quarter of 2008
Investment: Gross domestic private investment in the 1st quater of 2008 was $2,527 billion and $2,435 in the 3rd quarter of 2008.
Government spending: In the first quarter of 2008, the government spending was $4,930 billion and $ 5,218 in the 3rd quarter of 2008
Net exports: In the first quarter of 2008 the net exports was (- $757 billion) and in the 3rd quarter of 2008 it was (-$773 billion)
Real GDP actually increased by 0.013% between Quarter 1 and quarter 3 of 2008.
Of the 4 components of Aggregate demand, gross private investment decreased the largest by 3.641%
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