Q MEASURING OUTPUT AND INCOME IN-CLASS WORKSHEET 1 This question examines the expenditures approach to calculating GDP. You will use data on different macroeconomic expenditures to calculate the value of nominal GDP, and its four components, in a particular year. Below, you are provided data on macroeconomic expenditures last year in Asartaland: Durable Goods: $25 Imports: $6 Gross Investment: $23 Services: $20 Nondurable Goods: $18 Depreciation: $8 Exports: $11 Government Purchases: $35 Task 1: Calculate the value of consumption in the economy of Asartaland. Task 2: Calculate the value of net investment in the economy of Asartaland. Task 3: Calculate the value of government purchases in the economy of Asartaland. Task 4: Calculate the value of net exports in the economy of Asartaland. Task 5: Following the expenditures approach, calculate the value of nominal GDP of Asartaland. MEASURING OUTPUT AND INCOME IN-CLASS WORKSHEET 3 This question examines the calculation of nominal GDP from quantity and price data for all final goods in a macroeconomy. You will calculate spending on different goods and services, calculate nominal GDP, and analyze the effect of an increase in the production of one or more final goods on the value of nominal GDP. The Republic of Butters produces three final goods: gallons of milk, pounds of coffee, and pints of mocha syrup. Below, you are provided data on the quantity of each of these goods that was produced in the Republic of Butters last year and the price that was charged per unit: Good Price Quantity Total Expenditures (dollars) Gallons of milk $ 4.00 120 Pounds of coffee $10.00 50 Pints of mocha syrup $ 2.50 20 Task 1: In the table above, calculate the total expenditures on each of the three final goods produced last year in the Republic of Butters. Task 2: Calculate the value of nominal GDP in the Republic of Butters last year. Task 3: Suppose instead that the quantity of pounds of coffee produced increases to 70. Calculate the NEW value of nominal GDP for the Republic of Butters last year. Task 4: Suppose instead that the quantity of pints of mocha syrup produced increases to 60, but the quantity of pounds of coffee produced remains at 50. Calculate the NEW value of nominal GDP for the Republic of Butters last year. MEASURING OUTPUT AND INCOME IN-CLASS WORKSHEET 5 This question examines the calculation of real GDP from quantity and price data for all final goods in a macroeconomy and compares that calculation to that of nominal GDP. You will calculate real GDP and nominal GDP and analyze the distinction between the two. The country of Arctica produces two final goods: blocks of ice and salmon. Below, you are provided data on the quantity of each of these goods that was produced in Arctica and the price that was charged per unit during 2014 and 2015: Year Quantity of Ice Blocks Price of Ice Quantity of Salmon Price of Salmon 2014 105 $2 25 $10 2015 95 $3 30 $15 Task 1: Calculate the value of 2014 nominal GDP in Arctica. Task 2: Calculate the value of 2015 nominal GDP in Arctica. Task 3: Using 2014 as your base year, calculate the value of 2015 real GDP in Arctica. Task 4: Did nominal GDP or real GDP grow more between 2014 and 2015? Can you explain why?