# sem2 by ashrafp

VIEWS: 9 PAGES: 2

• pg 1
```									1. Using the following table to answer the following questions:

Country             Production of cars           Price of car in local      Production of              Price of book in
currency                   books                      local currency
A                   1                            1000                       100                        10
B                   1                            800                        50                         5

What is the GDP in local currency?
Suppose that market exchange rate is 2.0 (1 A’s currency = 2 B’s currency) what is the GDP of country A in B’s
currency?
What is the ratio of GDP between the two countries?
Use Purchasing Power Parity to compare country A’s GDP to country B’s GDP. Let your market basket be 1 car
and 800 books.

2. Use the following table to calculate the following questions.

Year                      Q-book                     P-book                    Q-computer                P-computer
2004                      800                        10 EUR                    60                        500 EUR
2005                      1000                       12 EUR                    100                       520 EUR

a.       Calculate nominal GDP for 2004 and 2005.
b.       Calculate the growth rate for 2005.
c.       Calculate real GDP for 2004 and 2005 using 2004 as your base year.
d.       Use part c to calculate the growth rate for 2004 and 2005.
e.       Use the GDP deflator to calculate inflation for 2005.
f.       What is the difference between CPI and GDP deflator

3.      India’s real GDP per capita (PPP) from 1960 through 1996 (36 years) increased from \$769 to \$1,546.
a.        Calculate the average annual growth rate of India’s real GDP per capita over the period 1960-1996
b.        Using the growth rate calculated in part a, what will India’s real income per capita be from 1996 to
2046 (50 years)

4.      Fill the table below

GDP
(bln const US\$, prices from          Population           GDP per capita (const
2000)                         (mln)             US\$, prices from 2000)Average annual
growth rate (%)
1960              2005        1960            2005       1960          2005      1960-2005
Malta                       0.37              3.88       0.33             0.4     1126.87       9618.44
Hungary                   12.97               57.7       9.98           10.09
Portugal                    20.9           116.29        8.94           10.55     2336.63     11023.06            3.51
Greece                    25.98            142.13        8.33            11.1     3120.29     12799.44            3.19
Spain                    113.17            678.02       30.46            43.4     3715.89                         3.24
Ireland                   14.13            124.73        2.83            4.16     4987.38      29990.8            4.07
Italy                    292.05           1132.82        50.2           58.61     5817.84     19329.16            2.70
Finland                   32.43            134.89        4.43            5.25     7320.46     25712.68            2.83
Austria                   53.35            208.68        7.05            8.23     7568.93     25346.01            2.72
Belgium                   69.26            249.35                                 7595.58     23796.15            2.57
France                   351.91           1430.13       45.68           60.87     7703.14     23493.68            2.51
Netherlands              106.46            403.04       11.49           16.32     9268.11     24696.45            2.20
United Kingdom           542.75           1619.53       52.37           60.23
Sweden                    84.09            270.31        7.48            9.02 11242.49        29954.22            2.20
Denmark                   56.58            171.21        4.58            5.42 12351.38         31611.6            2.11
Luxembourg                  4.19            23.83        0.31            0.46 13313.95        52182.86            3.08
GDP – Quiz

1. In which of the following GDP measures would a circuit board produced in South Korea by an American
company, for use in computers to be sold in France, be included?
a. South Korea GDP
b. U.S. GDP
c. France GDP
d. All of the above

2. What is always the best measure to use to determine how "rich" a country is?
a. GDP per capita
b. No one measure is unilaterally the best measure to use
c. National income
d. GNP per capita

3. Country A had a GDP of 100 million in the year 2000, while country B had a GDP of only 10 million. If
country A's GDP is growing at an annual rate of 3%, and country B's GDP grows at an annual rate of 8%,
who will have a higher GDP in the year 2050?
a. country A
b. Cuntry B
c. It cannot be determined from the information given
d. They will have the same GDP.

4. What time period has seen the most extreme growth in GDP worldwide?
a. 1950-1998
b. 1700-1820
c. 1500-1700
d. 1820-1950

5. Real GDP = 160, Nominal GDP = 200, GDP deflator equals:
a. 80
b. 100
c. 125
d. 320

6. Real GDP is
a. nominal GDP minus amortization
b. nominal GDP minus indirect taxes
c. nominal GDP corrected by the unemployment rate
d. nominal GDP corrected by the inflation rate

7. Which of the following poses a problem when economists try to collect reliable growth data?
a. There is often a bias present in data collected by official statistical agencies.
b. Many variables are inaccurately measured
c. Many relevant variables are immeasurable.
d. All of the above

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