The Big Picture, Tracking the Macroeconomy? General Instructions: Download your assignment template document from Course Documents. You will find this in the ‘Co

2. At the top of the template, insert: Your Name, Course Number and Section (BU204 – Section 0x), and the Date.

3. Insert your answers below each question or in the appropriate space provided for in the question. Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.

4. Your answers should

a. follow current APA format with citations to your sources,

b. include a list of references at the bottom of your last page,

c. be in Standard English with correct spelling, punctuation, grammar, and style,

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e. be formatted in Times New Roman,12-point, black font, and

f. respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.

5. Upload the completed assignment to the appropriate unit Dropbox.

6. Direct any questions about the assignment to your course instructor.

Assignment

This assignment addresses how economists measure various nations’ economies using measures such as Gross Domestic Product (GDP). In doing so, it highlights the various components of the GDP, the difference between nominal and real GDP, and the limitations of the GDP as a measure of national income.

1) U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell you, and what does it not tell you, about the well-being of U.S. residents? What are the limitations of the GDP as a measure of economic well-being? Given the limitations, why is GDP usually regarded as the best single measure of a society’s economic well-being?

(Enter response here.)

2) What is an intermediate good? How does an intermediate good differ from a final good? Explain why the value of intermediate goods produced and sold during the year is not included directly as part of GDP. Explain why the value of intermediate goods produced and not sold is included directly as part of GDP.

(Enter response here.)

3) GDP is defined as the market value of all final goods and services produced within a country in a given period of time. As we covered in the previous question, intermediate goods are not included in GDP. However, that is not the only production that is left out of GDP. Explain why some final goods and services, other than intermediate goods, are not included in GDP.

(Enter response here.)

4) The table below contains hypothetical data for country A for a given year.

Refer to the Table above to answer the following questions. Be sure to show all of your calculations.

a. What was country A’s GDP?

b. What was country A’s consumption?

(Enter response here.)

c. What was country A’s investment?

(Enter response here.)

d. What were country A’s government purchases?

(Enter response here.)

e. What were country A’s exports and imports? What was the net export?

(Enter response here.)

5) Calculate how much each of the following items is worth in terms of today's dollars using 180 as the price index for today.

a. In 1925, the CPI was 18 and the price of a movie ticket was $0.30.

(Enter response here.)

b. In 1930, the CPI was 14 and a cook earned $20 a week.

(Enter response here.)

c. In 1940, the CPI was 16 and a gallon of gas cost $0.20.

(Enter response here.)

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References:

Author. (Date.) Title. Source.

Directions for Submitting Your Assignment

Before you submit your assignment, you should save your work on your computer and use the correct filename that is specified in item 1 of the General Instructions for all assignments. When you are ready, submit to the Unit 1 Assignment Dropbox.