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SOF (DOC)

VIEWS: 13 PAGES: 2

									Ques 1:


(GDP and Depreciation) what is gross about gross domestic product? Could an economy enjoy a constant –
or growing – GDP while not replacing worn out capital?

Ques 2:


(Investment) given the following data, answer questions a through c.
                                                                   Billons of Dollars

New residential construction                                                  $500

Purchases of existing homes                                                    250

Sales value of newly issued stocks and bonds                                    600

New physical capital                                                             800

Depreciation                                                                      200

Household purchases of new furniture                                                 50

Net change in firm’s inventories                                                   100

Production of new intermediate goods                                                 700

a. What is the value of gross private domestic investments?
b. What is the value of net investments?
c. Are any intermediate goods counted in gross investments?


Ques 3:

(Labor Force) Refer to Exhibit 1 in the chapter to determine whether each of the following statements is true
or false.
a. Some people who are officially unemployed are not in the labor force.
b. Some people in the labor force are not working.
c. Everyone who is not unemployed is in the labor force.
d. Some people who are not working are not unemployed
Ques 4:

(Inflation) compute the inflation rate for each year 1989-2006 and determine which were years of inflation.
In which years did deflation occur? In which years did disinflation occur? Was there hyperinflation in any
years?


Year      CPI     Year   CPI     Year     CPI
1988      118.3   1994   148.2   2000    172.2
1989      124.0   1995   152.4   2001    177.1
1990      130.7   1996   156.9   2002    179.9
1991      136.2   1997   160.5   2003    184.0
1992      140.3   1998   163.0   2004    188.9
1993      144.5   1999   166.6   2005    195.3
                                 2006    201.8

								
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