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Econ 203 Lab1

The document provides feedback on answers submitted for calculating nominal and real output values, total nominal and real economy output, and GDP deflator for different years. It indicates the correct answers and marks lost for incorrect responses. It explains how to properly calculate real values, real output, total real economy output, and the GDP deflator using the relevant formulas. The document also shares the answers and feedback provided for additional questions on concepts related to GDP, inflation, unemployment rates, and their calculations.

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SooHan Moon
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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120 views

Econ 203 Lab1

The document provides feedback on answers submitted for calculating nominal and real output values, total nominal and real economy output, and GDP deflator for different years. It indicates the correct answers and marks lost for incorrect responses. It explains how to properly calculate real values, real output, total real economy output, and the GDP deflator using the relevant formulas. The document also shares the answers and feedback provided for additional questions on concepts related to GDP, inflation, unemployment rates, and their calculations.

Uploaded by

SooHan Moon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Nominal output value of A ($)

Congratulations! You have entered the correct answers.

Nominal output value of B ($)


Congratulations! You have entered the correct answers.

Total nominal economy output ($)


Congratulations! You have entered the correct answers.

Real output value of A ($)


The correct amount in Year 2 should be $147. You seem to have mixed up real
126
value with nominal value. This will cost you 1 mark.
The correct amount in Year 3 should be $105. You seem to have mixed up real
75
value with nominal value. This will cost you 1 mark.

To calculate the real value for product A for any year, multiply the quantity of product A
for that year by the price of product A in the base year.

You will lose 2 marks for this part.

Real output value of B ($)


The correct amount in Year 2 should be $96. You seem to have mixed up real value
80
with nominal value. This will cost you 1 mark.
The correct amount in Year 3 should be $90. You seem to have mixed up real value
60
with nominal value. This will cost you 1 mark.

To calculate the real value for product B for any year, multiply the quantity of product B
for that year by the price of product B in the base year.

You will lose 2 marks for this part.

Total real economy output ($)


The correct amount in Year 2 should be $243, however the answer you entered
206
was consistent with your earlier entries so you will not lose any marks.
The correct amount in Year 3 should be $195, however the answer you entered
135
was consistent with your earlier entries so you will not lose any marks.

To calculate the total real economy output for any year, simply add together the real
values for products A and B for that year.

You will not lose any marks for this part.

GDP deflator
131.1 The correct amount in Year 2 should be 84.8, however you have not entered this.
This amount can be calculated using formula: $206 ÷ $243 × 100 = 84.8. This will
cost you 1 mark.
The correct amount in Year 3 should be 69.2, however you have not entered this.
200 This amount can be calculated using formula: $135 ÷ $195 × 100 = 69.2. This will
cost you 1 mark.

GDP Deflator = [Total nominal economy output] ÷ [Total real economy output] × 100

You will lose 2 marks for this part.

Your answer was : is not included.


You have selected the correct answer.

(b)
Your answer was : is included.
The correct answer is: is not included.

The effect of the decline will be counted, but the change in the workweek itself is not
the production of a final good or service or a payment for work done.

You will lose 1 mark for this part.

(c)
Your answer was : is included.
The correct answer is: is not included.

The production of the car had already been counted at the time of the initial sale.

You will lose 1 mark for this part

Your answer was: 106.43


Congratulations! You have entered the correct answer.
b)
Your answer was: 6.43%
The correct answer was: 282.58%

To calculate the percentage of increase or decrease, we must use the following formula:
| [Real GDPyear 2] - [Real GDPyear 1] |
Rate of growth of real GDP = × 100%
[Real GDPyear 1]

(Where | | represents absolute value).

You will lose 3 marks for this part.

c)
Your answer was: $144,282,941.00
Congratulations! You have entered the correct answer.

d)
Your answer was: $551,993,244.00
Congratulations! You have entered the correct answer.

a) A rise in wage rates for labour without an increase in labour productivity will:
increase nominal GDP with no change in real GDP.
reduce both nominal and real GDP.
leave both real and nominal GDP unchanged.
increase both real and nominal GDP.

b) If real GDP in Ourland in 2007 was $1.1 million, when real GDP in 2006 had been
$1.0 million, this means that:
prices increased by 10 per cent.
real GDP grew by 10 per cent.
real GDP fell by 11 per cent.
real GDP grew by 1.0 per cent.
c) A change in a general price index such as the GDP deflator, from 120.0 in year 1 to
126.0 in year 2 indicates:
a decline in the production of goods and services
a rate of inflation of 6.0 percent.
a rate of inflation of 5.0 percent
a rate of deflation of 4.8 percent

d) If increasing retirements by 'baby-boomers' reduce the annual growth rate of the


labour force from 3 percent to 2 percent while employment continues to grow by 2.5
percent:
the unemployment rate will remain unchanged.
the unemployment rate will be about 2.5 percent.
the unemployment rate will increase by about 2 percent.
the unemployment rate will fall by about 0.5 percent.

e) To measure the current market value of the economy's total output we use:
output when prices are held constant
current profits earned by producers of goods and services
nominal GDP
current income received by households.

Marking:

(a) Your answer was : reduce both nominal and real GDP.
The correct answer is: increase nominal GDP with no change in real GDP.

You will lose 1 mark for this part.

(b) Your answer was : real GDP grew by 10 per cent.


You have answered this part correctly.
(c) Your answer was : a rate of inflation of 6.0 percent.
The correct answer is: a rate of inflation of 5.0 percent.

You will lose 1 mark for this part.

(d) Your answer was : the unemployment rate will remain unchanged.
The correct answer is: the unemployment rate will fall by about 0.5 percent.

You will lose 1 mark for this part.

(e) Your answer was : nominal GDP.


You have answered this part correctly.

Total marks for this question: 2

a) Suppose a country's population grows by 3% while its nominal GDP grows by 6%


and the GDP deflator increases from 125 to 127.5, then the standard of living as
measured by per capita real GDP:
improves by about 1%.
falls by about 3%.
is unchanged.
improves by 2%.

b) If the GDP deflator increased by 3 percent while nominal GDP grew by 5 percent:
real GDP would grow by 2 percent.
real GDP would grow by 8 percent.
real GDP would fall by 3 percent.
real GDP would be unchanged.

c) Based on your observations and study of economics you know that:


Canada has experienced falling prices, a deflation, over the past decade.
Canada has been without inflation, prices have been constant, for the past
decade.
annual inflation in Canada has averaged about 2.0 percent in the past decade.
annual inflation in Canada in the past decade has averaged about 10 percent.

d) Which of the following statements is incorrect:


the valued-added approach avoids double counting when GDP is measured.
sales of used cars, existing homes and other second-hand goods are not included
in GDP.
GDP measures the value of all market and non-market goods and services
produced during a given time period.
GDP measures the market value of final goods and services produced in a
country during a given time period.

e) To calculate the national unemployment rate you would need data on:
the number of people employed and unemployed.
the number of people aged 15 years and over.
the number of people currently employed.
the number of people currently not working and not looking for work.

Marking:

(a) Your answer was : improves by 2%.


The correct answer is: improves by about 1%.

You will lose 1 mark for this part.

(b) Your answer was : real GDP would grow by 2 percent.


You have answered this part correctly.

(c) Your answer was : annual inflation in Canada has averaged about 2.0 percent in the
past decade.
You have answered this part correctly.
(d) Your answer was : GDP measures the value of all market and non-market goods
and services produced during a given time period.
You have answered this part correctly.

(e) Your answer was : the number of people employed and unemployed.
You have answered this part correctly.

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