Part 1: Expenditures Approach to Calculating GDP
GDP and the National Income and Product Account (NIPA) Historical Tables, using section 1 Tables 1.1.5 and 1.1.6
Respond to the following:
1.
Why was nominal GDP greater than real GDP in each of those quarters? (What
does nominal GDP measure, and what quantitative measurement are use to determine its
value? What does real GDP measure and what quantitative process is used to determine it
value?)
2.
What is a 'base year' for measuring inflation, and what is the current base year
3.
What was the percentage change in Nominal GDP for the most recent quarter
compared to the previous quarter? What was the percentage change in Real GDP for the
two quarters?
4.
What accounts for the difference in the two percentages?
Visual 1a.
National Income and Product Account (NIPA) Historical Tables
(in billions of dollars)
2016, Quarter II 2016, Quarter III 2016, Quarter IV
Nominal GDP 18,450.1
18,675.3
18,869.1
Real GDP
16,583.1
16,727.0
16,813.3 2017, Quarter I
19,027.6
16,861.6 Visual 1b. The Nominal GDP and Real GDP
(in billions of dollars)
19,500.00
19,000.00
18,500.00
18,000.00
17,500.00
17,000.00
16,500.00
16,000.00
15,500.00
15,000.00 2016, Quarter II 2016, Quarter III
Nominal GDP Visual 1c. 2016, Quarter IV
Real GDP 2017, Quarter I The Changes in Nominal GDP and Real GDP
(quarter to quarter in percentage)
1.40%
1.20%
1.00%
0.80%
0.60%
0.40%
0.20%
0.00% Changes in Nominal GDP Changes in Real GDP Part 2: Income Approach to Calculating GDP
GDP and the National Income and Product Account (NIPA) Historical Tables, using Section 1Domestic Product and Income, table 1.7.5
Respond to the following:
1.
What is the difference between gross domestic product (GDP) and gross national
product (GNP)? What and why is there a difference in what GDP measures compared to
GNP?
2.
Based on the table, what calculations must you make to determine GNP from GDP?
3.
What is national income (NI)? What does NI measure? What type of tentative
conclusions might an economist make from analyzing this data?
4.
Which was higher in this year, GNP or NI? By how much?
5.
What specific line item ccalculations must you make to determine NI from GNP?
6.
NI is composed of a number of categories. What category makes up the largest
portion of NI?
Visual 2a.
GDP and the National Income and Product Account (NIPA) Historical Tables
(in billions of dollars)
2016, Quarter II 2016, Quarter III 2016, Quarter IV 2017, Quarter I
Gross Domestic 18,450.1
18,675.3
18,869.1
19,027.6
Product
Gross National 18,657.9
18,879.3
19,112.4
19,264.8
Product
Net National
15,756.2
15,957.6
16,167.7
16,289.2
Product
National
15,990.1
16,262.3
16,310.8
16,419.1
Income
Personal
15,929.4
16,111.1
16,166.2
16,329.7
Income Part 3: GDP in Different Countries
World Development Indicators database, using 8 countries, data series GDP (current US$),
population (Total), and the most recent year under Time (2015).
Respond to the following:
1.
List the countries by highest per capita GDP to lowest.
2.
Does the order remain the same for total GDP as for per capita GDP.
3.
If not, explain why is it different?
4.
Does per capita GDP reflect standard of living and quality of life? Why or why not?
Be specific.
Visual 3a.
World Development Indicators Database
Country
(alphabetically)
1
Argentina
Canada
Germany
Mexico
Nigeria
Turkey
United Kingdom
United States GDP Population Per Capita GDP 2
584711485365.1
1552807652015.4
3363446822668.3
1143793184190.1
486792837970.5
717879788566.8
2861090726739.6
18036648000000.0 3
43416755.0
35848610.0
81679769.0
127017224.0
182201962.0
78665830.0
65128861.0
321418820.0 4=2/3
13467.41
43315.70
41178.45
9005.02
2671.72
9125.68
43929.69
56115.71 Visual 3b.
World Development Indicators Database
Country
(alphabetically)
United States (USA)
United Kingdom (GBR)
Canada (CAN)
Germany (DEU)
Argentina (ARG)
Turkey (TUR)
Mexico (MEX)
Nigeria (NGA) Highest to Lowest
Population
18036648000000.0 (USA) 321418820.0 (USA)
3363446822668.3 (DEU) 182201962.0 (NGA)
2861090726739.6 (GBR) 127017224.0 (MEX)
1552807652015.4 (CAN) 81679769.0 (DEU)
1143793184190.1 (MEX) 78665830.0 (TUR)
717879788566.8 (TUR)
65128861.0 (GBR)
584711485365.1 (ARG)
43416755.0 (ARG)
486792837970.5 (NGA)
35848610.0 (CAN)
Highest to Lowest GDP Highest to Lowest
Per Capita GDP
56115.71 (USA)
43929.69 (GBR)
43315.70 (CAN)
41178.45 (DEU)
13467.41 (ARG)
9125.68 (TUR)
9005.02 (MEX)
2671.72 (NGA) Part 4: Index of Economic Freedom
Heritage Foundation's website, using 6 freedoms from property rights to entrepreneurship 8
countries
Respond to the following:
1.
Find the rank in economic freedom (overall) of the countries that you were using in
part III of the assignment.
2.
Find the rank in business, trade, financial freedom, and property rights of the
countries that you were using in part III of the assignment.
3.
Compare the rank in economic freedom (overall) and other indicators with the
order of the countries using the per capita GDP in the table in part III of the assignment.
Visual 4a.
Index of Economic Freedom (Overall)
Country
Country
Economic
(alphabetically)
Ranking
Freedom
Ranking
Argentina
156
50.4
Canada
7
78.5
Germany
26
73.8
Mexico
70
63.6
Nigeria
115
57.1
Turkey
60
65.2
United Kingdom 12
76.4
United States
17
75.1 Business
Ranking Trade
Ranking 57.3
81.9
86.6
70.7
48.9
64.3
89.9
84.4 66.7
88.4
87.0
80.0
62.3
79.4
87.0
87.1 Financial
Freedom
Ranking
50.0
80.0
70.0
60.0
40.0
60.0
80.0
70.0 Property
Rights
Ranking
32.4
88.3
82.9
58.1
35.3
61.3
93.8
81.3 Sources:
http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators
https://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&903=43
https://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=1&isuri=1
https://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&903=5
http://www.worldatlas.com/aatlas/ctycodes.htm
http://www.heritage.org/index/country/unitedkingdom
http://www.heritage.org/index/country/unitedstates
http://www.heritage.org/index/country/turkey
http://www.heritage.org/index/country/nigeria
http://www.heritage.org/index/country/mexico
http://www.heritage.org/index/country/germany
http://www.heritage.org/index/country/canada
http://www.heritage.org/index/country/argentina

 

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