Econ 1102: Principles of Macroeconomics - DOC

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					Name:___________________                Class Time:____________________
                                    HW # 2
                        “Principles of Macroeconomics”
                                  NSCC - Fall 2006
                                Professor: Moonsu Han

                         Due Sep. 25 (M), 2006: MWF Class
                          Due Sep. 26 (Tue): T TH Class

Question 1 Bring definitions for following terms and explain why we are calculating
those terms in Macroeconomics. (Total 3 pts., 1 pt. each)

    1. GDP:




    2. Nominal GDP and Real GDP:




    3. GDP Deflator:




                                           1
Question 2 Below are some data from the land of milk and honey. (Total 7 pts.)

     Year         Price of Milk       Q of Milk      Price of Honey      Q of Honey
     2001              $2               1000                $5               500
     2002              $2               2000                $5               100
     2003              $3               3000               $10               100

    1. Compute nominal GDP, real GDP, and the GDP deflator for each year, using
       2001 as the base year. (3 Pts.)




    2. Compute the percentage change in nominal GDP, real GDP, and the GDP deflator
       in 2002 and 2003 from the preceding year. (2 Pts.)




    3. Did economic well-being rise more in 2002(=from 2001 to 2002) or 2003(from
       2002 to 2003)? Explain. (2 Pts.)




                                          2

				
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