Question

# Part 1 Assignment: Gross Domestic Product · Complete the Gross Domestic Product worksheet. To access the...

Part 1

Assignment: Gross Domestic Product

· Complete the Gross Domestic Product worksheet.

To access the Gross Domestic Product data required in the worksheet from the government website, use the following click stream:

> Access the website, http://www.bea.gov

> Under the "National" heading, click “Gross Domestic Product.”

> Under the heading “Gross Domestic Product,” click on “Interactive Tables: GDP

and the National Income and Product Account (NIPA) Historical Tables.”

> Click on “Begin using the data”

> Select “Section I - Domestic Product and Income”

> Select “Table 1.1.5 Gross Domestic Product (A)(Q).”

> Use the column for 4th quarter of 2016. The quarter years are in roman numerals

(IV = 4 ).

USE 309 MILLION AS YOUR POPULATION NUMBER FOR COLUMN 2 CALCULATIONS.

GDP and Its Components

 Total (in billions of dollars) Per Person (in dollars) Percent of Total Gross Domestic Product, Y Consumption, C Investment, I Government purchases, G Net exports, NX

Part 2

Write a 500-word response to the following:

Explain the difference between nominal and real GDP and why real GDP is necessary to compare prior years’ data.

Format your paper using West Writing Style Handbook guidelines.

 Total (in billions of dollars) Per Person (in dollars) Percentage of total Gross Domestic Product, Y 18905.5 61182.85 100% Consumption, C 13056.9 42255.34 69% Investment, I 3126.2 10117.15 16.6% Government Purchases, G 3286.8 10636.89 17.4% Net Exports, NX -564.3 -1826.214 3%

Nominal GDP measures the value of national economic output at current prices i.e. it does not adjust for the effects of inflation. On the other hand, Real GDP measures the value of national economic output at constant prices i.e. it is adjusted for inflationary trends. This is the reason why real GDP is used to compare prior year's data since nominal GDP will fluctuate highly with changes in general price level.

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