Question

The following table provide some data for the Canada in 2019.  

Items	Billion of $
Wages paid to labour	685
Consumption expenditure	791
Taxes	394
Transfer payments	276
Profits	273
Investment	209
Government expenditure	267
Exports	322
Saving	38
Imports	366

a. Answer the following questions based on above table

i. Calculate Canada GDP.

ii. Explain the approach (expenditure or income) that you used to calculate the Canada GDP.

b. Malaysia’s real GDP was $560 billion in 2010 and $570 billion in 2011. Malaysia’s population was 130.7 million in 2010 and 130.8 million in 2011.

i. Calculate economic growth rate of Malaysia.

ii. Calculate growth rate of real GDP per person of Malaysia.

iii. How many years it takes for real GDP per person in Malaysia to double if the 2010 economic growth rate and population growth rate are maintained

Answer 1

Answer —i  Expenditure method

GDP = C+I+G+(X—M) = 791 +209+267+(322—366)= $1223 billion.

ii. Expediture method — Under this method final expenditures made by all the four sectors of the economy namely households sector ( consumption), firms sector ( investment) , government sector ( government expenditures) , and foreign sector ( net export) are added to reach to the market value of the GDP. It is estimated on annual final expenditures. So that GDP = C+I+G+Xn .   

b. i. Economic growth = ( GDP 2011—GDP 2010)/GDP 2010 ×100 ={ (570—560)/560 }×100 = 1.79%

ii. GDP per person in 2010 = GDP 2010/ population = 560000000000/130700000 = $4284.62

GDP per person 2011 = 570000000000/ 130800000= $4357.79

Growth rate of GDP per person ={ (4357.79—4284.63)/4284.62 } ×100 = 1.71%