AT&T; 5:10 PM @ 59% X Week 3 Subjective Assignment.doc Answer the following ques

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AT&T; 5:10 PM @ 59% X Week 3 Subjective Assignment.doc Answer the following questions (in your own words) in a word or PDF file and attach with your submission. Please make sure to write in detail (minimum four lines per response) using the terms and concepts learned in this chapter. For numeric questions, make sure to show all the steps. If you just write the answer it will result into zero points. . What are the components of Gross Domestic Product? Provide an example for each component. In your examples explain how that product or service is related to the component? 2. Refer to the table below and calculate Real GDP Nominal GDP. GDP Deflator for all years and Inflation rate for 2011, 2012 and 2013. Year Price of Pancakrs 3. In the economy of Talikastan in 2015, consumption was $12000, exports were $2000, GDP was $20,000, government purchases were $3600, and imports were $2400. What was Talikastan's investment in 2015? . The table below pertains to Goldbell, an economy in which the typical consumer's basket consists of 2 jackets and 15 hamburgers. Price of Hamburger $3 $4 $3 Price of Jackets Year 2009 $40 2010 $45 2011 $50 From the table give calculate the CPI for 2009 2010 and 2011. Also calculate the inflation rate for 2010 and 2011. (Make sure to show all steps). s. In 1973, Malcolm bought a Pontiac Firebird for $2,500. If the price index was 48.3 in 1973 and the price index was 263 in 2016, then what is the price of the Firebird in 2016 dollars? Open With Print

Explanation / Answer

Components of GDP

GDP is the market value of all goods and services produced within a country’s border during a given year.

The components of GDP are Personal consumption expenditure ( C ) + Business Investment (I) + Government spending (G) + Net exports ( X-M) i.e. exports minus imports.

GDP= C+I+G+(X-M)

Personal Consumption Expenditure ( C ): This is the consumption spending by households. This component measures the monetary value of consumer goods and services which are purchased by households during a given year. These are classified into consumer durables, semi-durables, non-durables and services

Business Investment (I)

The business investment includes investments that companies make to produce consumer goods. The two sub-categories are Fixed Investment and Change in Private Inventory. Fixed investments are investments in capital goods, software, and manufacturing equipment. Changes in Private Inventory are how much businesses add to the inventories of the goods they plan to sell.

Government spending (G)

The includes all government spending. It includes (i) purchase of intermediate goods and (ii) wages and salaries paid by the government.

Net exports (X-M)

Exports add to GDP and imports subtract from GDP.

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