The Ricardian Model
Autor: Tim • January 28, 2018 • 1,783 Words (8 Pages) • 483 Views
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c) the government spends $100 million to build a dam;
d) a car producer buys parts from a local distributor for $1 million, assembles the parts, and sells the resulting cars for $2 million;
e) a real estate agent sells a house for $200,000 that the previous owners had bought 10 years earlier for $ 100,000. The agent earns a commission of $6,000;
f) during a recession, the government raises unemployment benefits by $ 100 million;
g) A new US airline imports $50 million worth airplanes from the European company Airbus;
h) a store buys $100,000 of chocolate from Belgium and sells it to consumers in the United
GDP
- What are the limits of GDP as measure of a country’s economic performance?
- What is the difference between nominal and real GDP? Why do economists use real GDP to measure economic growth?
- What is the GDP deflator?
- Why are real and nominal GDP the same in the base year.
- What is the value of the GDP deflator in the base year?
- What are the problems in the choice of the base year? What is the solution statistician are using to fix the problems?
-
Year
Price of good A
Price of good B
Quantity of good A
Quantity of good A
2010
1
2
100
50
2011
1
2
200
100
2012
2
4
200
100
- Compute Nominal GDP and real GDP for each year using 2010 as the base year.
- Compute the percentage change in Nominal and real GDP for each year.
- Did economic well-being rise more in 2010 or in 2011? Why?
- Compute the GDP deflator for each year
CPI
- What is the CPI?
- What is the HCPI?
- Illustrate the differences between CPI and GDP Deflator.
- Suppose that the residents of US spend all of their income on products A, B and C.
QA
PA
QB
PB
QC
PC
2010
150
250
100
125
550
100
2011
125
275
130
170
550
150
2012
130
280
135
170
555
155
If the base year is 2010, what is the CPI in 2010, 2011 and 2012? What is the inflation rate in 2011 and in 2012?
- Illustrate the CPI problems
- Consider the following table
I-phone made in China
Price of I-phone made in china
Pears
Price of pears
Aircraft made domestically and sold abroad
Price of the aircraft made domestically and sold abroad
Second hand truck made domestically
Price of second hand truck made domestically
2012
100
200
90
100
500
100
1
15
2013
150
250
100
125
550
100
1
20
2014
125
275
130
170
550
150
2
20
If the base year is 2012, what is the CPI in each year? What is the
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