Macroeconomics
1.
Quiz 5
GDP
What is GDP?
2. (use table on the next page) What is the most recent estimate of the US GDP in current dollars?
3. (use table on the next page) Total real production of goods and services in the US increased 10 times since year _____.
4. Which of the following is an intermediate good?
a)
the purchase of gasoline by a family for a vacation trip
b)
the purchase of a pizza by a college student
c)
the purchase of hockey equipment by a professional hockey team
d)
the purchase of jogging shoes by a professor
e)
a Broadway show
5. Suppose Nucor Steel sells $2,000 worth of steel to Ford, other producers sell $5,000 worth of other inputs to Ford; Ford
then uses the steel and other inputs to make a Taurus which it sells to the car dealership for $15,000. The car
dealership sells the car to a school teacher for $18,000. What is the total contribution to GDP made by this entire series
of transactions?
6.
GDP excludes expenditures by:
A) businesses on pollution control equipment.
B) business for travel and entertainment.
C) government on military hardware.
D) consumers on used automobiles.
7. Which of the following is included into the income measure of the US GDP?
a. profits of Randy the Illegal Drug-Dealer
b. salary of Jane, a US citizen accountant working in Korea
c. the value of a new garage Sam the School Teacher built himself in his back yard
d. amount of a cash gift an ESC student received from parents
e. salary of Maria, a citizen of Mexico, working legally at a dental office in Queens
8. GDP in an economy is $4,600 billion. Consumer expenditures are $3,500 billion, government purchases are $900
billion, and gross private domestic investment is $400 billion. Find Net exports (Exports minus Imports).
9. Suppose an economy’s real GDP is $10 billion in 2006 and $11 billion in 2007. Assume that population was 100 million
in 2006 and 102 million in 2007. Show your work below.
a.
What is the growth rate of real GDP?
b. What is the growth rate of real GDP per capita?
10. Find and attach a current news article that mentions GDP, recession, business cycle, or economic growth.
11. GDP per capita is not a correct measure of the country’s standard of living. Give at least two reasons why.
Current-Dollar and "Real" Gross Domestic Product
GDP in
billions of
current
dollars
GDP in
billions of
2000
dollars
GDP
deflator
GDP in billions
of current
GDP in billions
dollars
of 2000 dollars GDP deflator
1929
1930
103.6
91.2
865.2
790.7
0.12
0.12
1969
984.6
3765.4
0.26
1970
1038.5
3771.9
0.28
1931
76.5
739.9
0.10
1971
1127.1
3898.6
0.29
1932
58.7
643.7
0.09
1972
1238.3
4105.0
0.30
1933
56.4
635.5
0.09
1973
1382.7
4341.5
0.32
1934
66.0
704.2
0.09
1974
1500.0
4319.6
0.35
1935
73.3
766.9
0.10
1975
1638.3
4311.2
0.38
1936
83.8
866.6
0.10
1976
1825.3
4540.9
0.40
1937
91.9
911.1
0.10
1977
2030.9
4750.5
0.43
1938
86.1
879.7
0.10
1978
2294.7
5015.0
0.46
1939
92.2
950.7
0.10
1979
2563.3
5173.4
0.50
1940
101.4
1034.1
0.10
1980
2789.5
5161.7
0.54
1941
126.7
1211.1
0.10
1981
3128.4
5291.7
0.59
1942
161.9
1435.4
0.11
1982
3255.0
5189.3
0.63
1943
198.6
1670.9
0.12
1983
3536.7
5423.8
0.65
1944
219.8
1806.5
0.12
1984
3933.2
5813.6
0.68
1945
223.1
1786.3
0.12
1985
4220.3
6053.7
0.70
1946
222.3
1589.4
0.14
1986
4462.8
6263.6
0.71
1947
244.2
1574.5
0.16
1987
4739.5
6475.1
0.73
1948
269.2
1643.2
0.16
1988
5103.8
6742.7
0.76
1949
267.3
1634.6
0.16
1989
5484.4
6981.4
0.79
1950
293.8
1777.3
0.17
1990
5803.1
7112.5
0.82
1951
339.3
1915.0
0.18
1991
5995.9
7100.5
0.84
1952
358.3
1988.3
0.18
1992
6337.7
7336.6
0.86
1953
379.4
2079.5
0.18
1993
6657.4
7532.7
0.88
1954
380.4
2065.4
0.18
1994
7072.2
7835.5
0.90
1955
414.8
2212.8
0.19
1995
7397.7
8031.7
0.92
1956
437.5
2255.8
0.19
1996
7816.9
8328.9
0.94
1957
461.1
2301.1
0.20
1997
8304.3
8703.5
0.95
1958
467.2
2279.2
0.20
1998
8747.0
9066.9
0.96
1959
506.6
2441.3
0.21
1960
526.4
2501.8
0.21
1999
2000
9268.4
9817.0
9470.3
9817.0
0.98
1.00
1961
544.7
2560.0
0.21
2001
10128.0
9890.7
1.02
1962
585.6
2715.2
0.22
2002
10469.6
10048.8
1.04
1963
617.7
2834.0
0.22
2003
10960.8
10301.0
1.06
1964
663.6
2998.6
0.22
2004
11685.9
10675.8
1.09
1965
719.1
3191.1
0.23
2005
12433.9
11003.4
1.13
1966
787.8
3399.1
0.23
2006
13194.7
11319.4
1.17
1967
832.6
3484.6
0.24
1968
910.0
3652.7
0.25
2007
2008
13843.0
14,412.8
11567.3
11,712.4
1.20
1.23