ANSWER FILE TO PROBLEM SET 1 – MACROECONOMICS 2023 - CLABE
Name: Nazario
Surname: Palma
Matricula on number: 0001068385
1) Define the following concepts:
a) Nominal and real GDP: GDP (Gross Domes c Product) is either the total value of expenditure
on domes cally produced goods and services within an economy or the total income earned by
domes cally located factors of produc on. If the value of these goods and services is computed
using current market prices, it is called nominal GDP. On the other hand, if it is computed using
the prices of a base year, it is called real GDP.
b) GDP growth rate (analy cal expression): GDP(t) - GDP(t-1)/GDP(t-1)
c) Unemployment rate: The unemployment rate is the percentage of the labor force (in a given
area) that is currently unemployed but is ac vely looking for a job.
d) Labor force: Labor force is the amount of labor available for producing goods and services
including both employed and unemployed persons.
e) Employment rate: Percentage of labor force that is employed ( working at a paid job).
f) Discouraged workers: They are workers who have stopped looking for work because they
haven’t found suitable employment op ons or failed to be hired when applying for a job.
g) GDP deflator: It is a measure of the price level and I computed as follows:
GDP deflator = (Nominal GDP)/(Real GDP)
h) CPI: The Consumer Price Index is a measure of the overall level of prices published by na onal
sta s cal ins tutes and can be used to track changes in the typical household’s cost of living, to
adjust many contracts for infla on and to allow comparing $ or € amounts over me.
2) a)
b)
c)
d) The base year is 2015
c) If the rate of growth of real GDP is lower than that of nominal GDP, it implies that the infla on
rate is higher than zero since the rate of growth of real GDP is equal to that of nominal GDP less the
rate of infla on.