ECON 102- INTRODUCTION TO ECONOMICS II
DEPARTMENT OF ECONOMICS
BİLKENT UNIVERSITY
Fall 2015
Name: _______________________
No: ________________________
Section:_______________________
Quiz Questions 1
Please answer the following questions. Give clear and precise answers in complete
sentences. Show all your computations to receive full marks.
(20 points each 45 minutes)
Question 1: (20 points) Define Gross Domestics Product. Why do you use only the final goods in
computing the GDP measure? What is double counting? Give an example.
Question 2: (20 points) What are the three different methods of GDP calculations? Explain the
income approach and write the equation that describes the GDP computation method by the
income approach
Question 3: (20 points) The following table contains the information on Turkish Real GDP and
Nominal GDP computed by expenditure approach. The Real GDP is computed with 1998 prices.
GDP Real
GDP
Deflator
2003 2004 2005 2006 2007
2008
2009 2010
76.3
83.4
90.4
96.7
101.2
101.9
97.0
105.8
596.1
670.3
717.8
784.3
833.1
932.8
982.1
1038.5
GDP
Nominal
Source: TCMB: EVDS system. The values are in billion TL. The Base year for the real GDP is 1998.
Source: TCMB: EVDS system. The values are in billion TL. The Base year for the real GDP is 1998.
a) Give the formula for Growth rate of the economy. Compute the growth rate for 20032004 and 2008-2009.
b) Compute the Nominal GDP for the years, 2003, 2004, 2008 and 2009.
c) Give the formula for inflation rate. Compute the inflation rate for the year’s 2003- 2004,
and 2008-2009.
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Questions 4: (25 points) In ANKUVISTAN, only three goods are produced, Pizza, Manti and Kebab.
The table below shows the prices and quantities of the three goods in years 1 and 2.
Year 2013
Pizza
Manti
Kebab
a)
b)
c)
d)
e)
Year 2014
Quantity
Price
Quantity
Price
6
20
10
100
20
100
10
20
8
100
30
110
Given this information, calculate the nominal GDP.
Compute the real GDP using year 2014 as the base.
Calculate the growth rate of economy. Do you see the effect of prices in this result? Why?
Calculate the GDP deflator.
Compute the inflation rate for the 2013-2014 period.
Please show all your computations.
3
Question 5: (15 points ) Suppose that the following transactions/ or exchange took place. For
each explain whether they are counted in the Turkish GDP expenditures and how are they
included into the GDP computations.
1) Firm Aselsan purchases a welding equipment for 500 million TL.
2) Firm Toyota builds a new building to be used as part of their factory, which costs 20
million TL.
3) You went to a movie and paid 15TL for the ticket price.
4) You gave a gift to a friend worth 15 TL.
5) You put 15 TL to your savings account.
6) You purchase a ticket from Lutfhansa to fly to Berlin for 1000TL, where as your friend
decide to fly from Ankara to Berlin with THY and pays 900TL for the ticket price.
.
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