04 Jun Question INTRODUCTION TO MACROECONOMICS
Question
INTRODUCTION TO MACROECONOMICS
HOMEWORK # 1
18 points possible
NAME ______________________________
1. Consider the following numbers:
Consumption 2500 Government Spending 600
Imports 1300 Exports 1200
Inventory Investment -300 Fixed Investment*
700
Depreciation 200 Taxes 700
* Fixed investment is residential fixed investment plus non-residential fixed investment. Gross investment is fixed
investment plus inventory investment
Calculate
a. GDP _____________
b. Net Exports _____________
c. Final Sales _____________
d. Net Investment _____________
2. A household has income of $50,000, spends $30,000 and pays taxes of
$15,000. What is the household’s level of saving? _________________
3. Suppose that nominal GDP in 1990 was $4 trillion and real GDP was $5
trillion. What was the GDP price deflator in 1990? _________________
4. Given that prices generally rise over time, do the figures in 3 suggest that
1990 comes AFTER the base year or BEFORE the base year? _________________
5. If real GDP is $6,000,000 and the population is 250, what is per capita GDP?
_________________
6. In 2005, I had a new home built at a cost of $150,000. This home provided services worth $10,000 in 2006.
In which categories of the national income accounts should this home appear? The choices are consumption,
fixed investment, inventory investment, government spending, and net exports.
2005: $ ___________ in _____________________________________
(amount) (category)
2006: $ ___________ in _____________________________________
(amount) (category)7. On December 28th, 2005, IBM produced a personal computer at a cost of $2,000. On January 3rd, 2006,
the computer was sold to the Indianapolis Police Department for $2,000. Describe how this computer should
show up in the national income accounts. Use the categories from the prior question
______: $_______ in _______________________________________
(year) (amount) (category)
______: $_______ in _______________________________________
(year) (amount) (category)
______: $_______ in _______________________________________
(year) (amount) (category)
What is the contribution of the computer to 2005 GDP? ______________
What is the contribution of the computer to 2006 GDP? ______________
8. On January 10th, 2006, the U.S. Department of the Treasury purchased a German-made armored car for
$75,000. Describe how this transaction should show up in the national income accounts. Use the categories
from the prior question
2006: $ ___________ in _____________________________________
(amount) (category)
2006: $ ___________ in _____________________________________
(amount) (category)
What is the contribution of the armored car to 2006 GDP? ______________
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