ECON 104 Midterm: Second Midterm review

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bluecat52

11 May 2017

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Gross domestic product market value of all final goods and services produced in a country during current period of time; may not be able to calculate well-being. Y = c + i + g + nx, where y = gdp, c = private consumption expenditures, i = gross private. Domestic investment, g = government expenditures and investment, nx = net exports. Consumption expenditures spending by households in goods and services, not included in spending on new houses (this is counted in investments) Gross private domestic investment investment spend by firms on new factories, office buildings, and inventories. Government expenditures spending spent by the federal and local governments on goods a(cid:374)d ser(cid:448)i(cid:272)es su(cid:272)h as tea(cid:272)hers" salaries, high(cid:449)ays and aircraft carriers. Net exports value of exports minus value of imports. Nominal gdp: the value of all final goods and services evaluated at current prices. Real gdp: value of final goods and services evaluated at base-year prices.

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The largest component of GDP as measured by the expenditure approach is:

A) gross private domestic investment.

B) personal consumption expenditures.

C) government expenditure on goods and services.

D) net exports.

magentaraven621

The components of GDP in the accompanying table were produced by the Bureau of Economic Analysis. Category Components of GDP in 2013 (billions of dollars)

Consumer spending

Durable goods $1,263.0

Nondurable goods 2,622.9

Services 7,615.7

Private investment spending

Fixed investment spending 2,564.0

Nonresidential 2,047.1

Structures 456.4

Equipment and intellectual property products 1,590.7

Residential 516.9

Change in private inventories 106.1

Net exports

Exports 2,259.9

Imports 2,757.2

Government purchases of goods and services and investment spending

Federal 1,245.9

National defense 770.7

Nondefense 475.1

State and local 1,879.6

1) Calculate 2013 consumer spending.

2) Calculate 2013 private investment spending.

3) Calculate 2013 net exports.

4) Calculate 2013 government purchases of goods and services and government investment spending.

5) Calculate 2013 gross domestic product.

6) Calculate 2013 consumer spending on services as a percentage of total consumer spending.

7) Calculate 2013 exports as a percentage of imports.

8) Calculate 2013 government purchases on national defense as a percentage of federal government purchases of goods and services.

greenserval409

Table 1.1.5. Gross Domestic Product
Line		2015		2016
Line		III	IV	I	II
1	Gross domestic product	18141.9	18222.8	18281.6	18436.5
2	Personal consumption expenditures	12356.9	12438.8	12498	12695.1
3	Goods	4043	4038.1	4008.7	4086
4	Durable goods	1364.7	1371.8	1366.6	1390.4
5	Nondurable goods	2678.4	2666.3	2642	2695.6
6	Services	8313.9	8400.6	8489.3	8609
7	Gross private domestic investment	3072.1	3059.9	3036.8	2973.6
8	Fixed investment	2995.3	2997.2	2994.8	2992.2
9	Nonresidential	2331.5	2311.3	2292.4	2294
10	Structures	508.5	487.8	486	479.3
11	Equipment	1099.7	1092.6	1066.3	1056.6
12	Intellectual property products	723.3	730.9	740.1	758.2
13	Residential	663.8	685.9	702.4	698.2
14	Change in private inventories	76.8	62.7	41.9	-18.6
15	Net exports of goods and services	-523.4	-520.9	-507.4	-495.5
16	Exports	2259.1	2211.7	2179	2206.8
17	Goods	1495.6	1448.3	1410.9	1437.8
18	Services	763.5	763.4	768.1	769
19	Imports	2782.5	2732.6	2686.3	2702.3
20	Goods	2284.1	2235	2185.7	2199.1
21	Services	498.4	497.7	500.7	503.2
22	Government consumption expenditures and gross investment	3236.3	3245	3254.3	3263.4
23	Federal	1225	1234	1233.8	1239.2
24	National defense	729.3	735.6	731.4	729.3
25	Nondefense	495.7	498.4	502.4	509.9
26	State and local	2011.3	2011	2020.5	2024.1

Table 1.1.6. Real Gross Domestic +A1:F26Product, Chained Dollars
Line		2015		2016
Line		III	IV	I	II
1	Gross domestic product	16454.9	16490.7	16525	16570.2
2	Personal consumption expenditures	11255.9	11319.3	11365.2	11487.4
3	Goods	3932.6	3953.4	3964.7	4033.4
4	Durable goods	1512.4	1527.3	1524.9	1561.3
5	Nondurable goods	2451.3	2458.4	2471.1	2505.6
6	Services	7327.2	7369.8	7403.9	7460.5
7	Gross private domestic investment	2882.2	2865.4	2841.5	2769.9
8	Fixed investment	2794.5	2793.3	2786.7	2769
9	Nonresidential	2217.5	2198.8	2179.7	2174.8
10	Structures	453.4	435.1	435.2	425.8
11	Equipment	1085.7	1078.6	1052	1042
12	Intellectual property products	683.1	690.7	697.1	711.7
13	Residential	573.7	589.5	600.7	588.8
14	Change in private inventories	70.9	56.9	40.7	-12.4
15	Net exports of goods and services	-547.1	-566.6	-566.3	-562
16	Exports	2120.4	2105.8	2102	2108.1
17	Goods	1440.7	1423.8	1424.1	1430.3
18	Services	679.3	681.1	677.3	677.4
19	Imports	2667.6	2672.4	2668.2	2670.1
20	Goods	2197.4	2201.4	2194.1	2194.3
21	Services	468.2	469	471.9	473.6
22	Government consumption expenditures and gross investment	2894.4	2901.7	2913.2	2902.1
23	Federal	1112.7	1123	1118.7	1117.8
24	National defense	669	676.3	670.9	665.7
25	Nondefense	443.1	446.2	447.2	451.4
26	State and local	1779.9	1777.1	1792.6	1782.6
27	Residual	-49.2	-49.6	-46.5	-52.6

1.Why was the nominal GDP greater than real GDP in each of those quarters?

2.What was the percentage change in Nominal GDP for the most recent quarter compared to the previous quarter? What was the percentage change in real GDP for the two quarters?

3.What accounts for the difference in the two percentages?

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ECON 104 Midterm: Second Midterm review

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