Part 1: Expenditures Approach to Calculating GDP
Part 1: Expenditures Approach to Calculating GDP (weight 25% of the assignment grade)
Complete the following exercise
Visit the Bureau of Economic Analysis Web site at www.bea.gov Select National, then Interactive Tables: GDP and the National Income and Product Account (NIPA) Historical Tables, click “Beging using the data”, and use Section 1 – Tables 1.1.5 and 1.1.6 to identify the GDP (nominal GDP) and real GDP for the past four quarters.
a) Present the information that you received in your project as a table.
b) Write a report (1 page double – spaced), which contains the analysis of the results you received.
In this report consider, but do not be limited to the following:
1. Why was nominal GDP greater than real GDP in each of those quarters?
2. What were the percentage changes in Nominal GDP and real GDP for the most recent quarter?
3. What accounts for the difference?
Part 2: Income Approach to Calculating GDP (weight 25% of the assignment grade)
Complete the following exercise:
Go to http://www.bea.gov/
Find the information on GDP in billions of current dollars for the past four quarters (in GDP and the National Income and Product Account (NIPA) Historical Tables –click “Begin using the
data”- choose Section 1- domestic product and income- table 1.7.5 – Create the table that contains the following information quarterly:
Gross domestic product
Gross national product
Net national product
National income
Personal income
Write a report in your own words (1 page, double-spaced), which contains the analysis of the results you received. In this report consider, but do not be limited to the following:
1. What is the difference between gross domestic product (GDP) and gross national product (GNP)?
2. Based on the table, what calculations must you make to determine GNP from GDP?
3. What is national income (NI)?
4. Which was higher in this year, GNP or NI? By how much?
5. What calculations must you make to determine NI from GNP?
6. What was the main component of NI?
Part 3: GDP in Different Countries (weight 25% of the assignment grade)
Complete the following exercise:
Go to World Development Indicators database:
Choose the country in the window on the top of the page.
| Fill in the table below. Calculate the per capita GDP for the most recent available year for the countries listed in the table with the equation given in the far right column. Country | GDP (in millions of U.S. dollars) | Population (in thousands) | Per Capita GDP (in thousands of U.S. dollars) |
| 1 | 2 | 3 | 4 = 2/3 |
| United States | |||
| Japan | |||
| China | |||
| Mexico | |||
| Russian Federation | |||
| Switzerland | |||
| Sweden | |||
| Luxembourg |
Write a short report in your own words (1 page, double-spaced), which contains the analysis of the results you have gotten. In this report consider, but do not be limited to the following:
1. List the countries by highest per capita GDP to lowest.
2. Does the order remain the same for total GDP as for per capita GDP?
3. If not, explain why is it different?
Part 4: Index of Economic Freedom (weight 25% of the assignment grade)
Log onto the Heritage Foundation’s website at http://www.heritage.org/Index/
“The 2011 Index of Economic Freedom covers 183 countries across 10 specific freedoms such as trade freedom, business freedom, investment freedom, and property rights. The 2011 Index provides an even clearer picture of economic freedom by using data-driven equations which allows countries to be graded between scores of 0 and 100.”
Click on RANKING to find the rank of economic freedom. Lower rank scores indicate a higher level of economic freedom.
Click on EXPLORE to find the rank of business, trade, financial freedom, and property rights.
1. Find the rank in economic freedom (overall) of the countries listed on the table in part III of the assignment.
2. Find the rank in business, trade, financial freedom, and property rights of the countries listed on the table in part III of the assignment.
3. Compare the rank in economic freedom (overall) and other indicators with the order of the countries using the per capita GDP in the table in part III of the assignment.
Write a report in your own words (1 page, double-spaced), which contains the analysis of the results that you received.
Answer preview to Part 1: Expenditures Approach to Calculating GDP
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