Question

Use the following data for the next three problems. 2014 2015 Price Quantity Price Quantity Good...

Use the following data for the next three problems.

2014 2015
Price Quantity Price Quantity
Good X $20 50 $22 55
Good Y $5 150 $6 140
Good Z $100 10 $100 12

Using 2014 as the base year, what is real GDP in 2015?

$3000

$3310

$2750

$3060

Which of these is NOT an expenditure component in GDP?

government purchases

investment

net exports

transfer payments

consumption

Which of these is NOT one of the 3 main concerns of Macroeconomics?

inflation

output growth

unemployment

the trade deficit
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Homework Answers

Answer #1

Ans 1: Real GDP: Value of output by using base year prices

Real GDP of 2015 = Price of 2014 x Output of 2015

= $20x55 + $5x140 + $100x12

= $1100 + $700 + $1200

= $3,000

Therefore, the Real GDP of 2015 is $3,000

Ans 2: Transfer Payments, it is not the component of expenditure identity.

The aggregate expenditure identity = C + I + G + NX

where, C = Consumption expenditure

I = Investment Expenditure

NX = Exports-Imports , Net exports

Ans 3: The Trade deficit is not the main 3 concer of macroeconomics.

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