...of the course, you will even be asked to rate the extent to which the TCOs have been covered. There are 9 TCOs specified for GM545. Review the TCOs by clicking on Course Syllabus at the top of the course home page, and then clicking on the Terminal Course Objectives link. Also, please note that the TCO(s) to be covered during any given week are specified in the Objective section for that course week. Quiz 2 addresses material covered in Weeks 4 and 5 of the course. The TCOs at issue are: Course Objective Description E Given an introduction to key macroeconomic variables, distinguish between real and nominal output variables, between various inflation measures, and demonstrate the derivation of the unemployment rate; assess the sensitivity of strategic policy decisions based on these measures to the quality of available statistical data. F Given increasing interdependencies between trading nations and the analogy of foreign currency as a commodity, analyze the effects of demand and supply pressures on exchange rates; students must demonstrate an understanding of trade barriers in general, as well as the effectiveness of institutional entities (e.g., GATT, NAFTA, and EU). You will note that the problems that have been assigned from the book focus on these TCOs. The problems address the basics while Discussions topics focus on applications. The quizzes emphasize the basics. So, make sure you completely understand the assigned homework problems before attempting...
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...Product? GDP stands for Gross Domestic Product. GDP is the monetary value of all goods and services produced in a country within a given time period. Any goods or services produced outside the specified country is not included the country’s GDP. GDP is usually used as an indicator of an economy’s health and it also measure a country’s standard of living. GDP is often calculated quarterly and yearly and is used as a comparison to the previous quarter or year. GDP is composed of overall consumption of the country, government spending, investments and net exports (exports – imports). The formula for calculating is GDP = C + I+ G + (X-M). b).Distinguish between real gross domestic product and nominal gross domestic product. Nominal Gross Domestic Product is a monetary measure of the value of finished goods and services produced for a period of time (quarterly or annually). Nominal GDP does take inflation into consideration. Real Gross Domestic Product calculates the value of economic productivity in a given year accustomed for changes in price. It takes into consideration inflation before giving results. Real GDP is very different from Nominal GDP. This is proven below: 1. Nominal GDP does take inflation or deflation into consideration in its calculation whereas Real GDP is obtained only after including the effect of inflation or deflation. 2. Nominal GDP is calculated at current prices whereas Real GDP is calculated on a base year. 3. Real GDP shows the actual...
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...Study Questions 1 (GDP) Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Gross domestic product is a measure of the total value of all A) consumer income in an economy over a period of time. B) capital accumulation in an economy over a period of time. C) sales in an economy over a period of time. D) final goods and services produced in an economy over a period of time. 1) 2) If Nike, an American corporation, produces sneakers in Thailand this would A) add to neither U.S. GDP nor Thailand's GDP. B) add to Thailand's GDP but not to U.S. GDP. C) count as part of U.S. GDP since it is a U.S. corporation. D) count for both Thailand's GDP and U.S. GDP. 2) 3) In 2009, Ozzie purchased a 1999 Ford Escort from his neighbor for his son, purchased a 1999 "one owner" Camry from Larchmont Toyota for his wife, bought a 2009 new Ford for himself, and sold his 1993 Dodge Caravan to his teenage nephew. Which, if any, of these transactions will be included in GDP in 2009? A) only the purchase of the Ford B) the purchase of the Ford and the Caravan C) all four transactions D) all three purchases but not the sale 3) 4) Intermediate goods are excluded from GDP because A) they represent goods that have never been purchased so they cannot be counted. B) their inclusion would understate GDP C) their inclusion would involve double counting. D) the premise of the question...
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...MIDTERM REVIEW 1. Distinguish between an intermediate and final good. Give an example of each. 3. What are the four components of GDP by expenditures? 4. Given the following data, calculate GDP. 5. Following is a circular flow diagram. Complete the financial flows in the four empty rectangles: 6. List the various leakages and injections in an economy: 7. What must be true about leakages and injections for national income to be in equilibrium? 8. Distinguish between demand-pull and cost-push inflation. 9. Classify each of the following cases as frictional, structural, or cyclical unemployment. (a) Eliot worked at a General Motors plant in Oshawa. He lost his job because cheaper cars imported from Japan have taken market share away from GM. (b) Julia’s youngest child just left for college, so Julia has started to look for a job. (c) Ling, a product manager, lost her job because of a temporary slowdown in her industry. 10. Suppose the labour force data are: a) What are the participation rates in 2008 and 2009? b) What are the unemployment rates in 2008 and 2009? 11. Suppose actual output is equal to potential output, the natural rate of unemployment is 4% and frictional unemployment is 1%. What are cyclical and structural unemployment rates? 12. What is the difference between real GDP and nominal GDP? 13. Suppose that actual GDP is $42.5 billion and cyclical...
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...Assignment On Relationship between GDP & HDI Submitted ToCourse Instructor Of B-University of DhakaDepartment of Banking | Submitted ByMd. Yasir ArafatId No. 62B.B.A 13th BatchDepartment of BankingUniversity of Dhaka | Date of Submission08.o7.09 | Introduction to GDP A region's gross domestic product, or GDP, is one of the ways of measuring the size of its economy. The GDP of a country is defined as the total market value of all final goods and services produced within a country in a given period of time (usually a calendar year). It is also considered the sum of value added at every stage of production (the intermediate stages) of all final goods and services produced within a country in a given period of time. Components of GDP Each of the variables C (Consumption), I (Investment), G (Government spending) and X − M (Net Exports) (where GDP = C + I + G + (X − M) as above) C (Consumption) is private consumption in the economy. This includes most personal expenditures of households such as food, rent, medical expenses and so on but does not include new housing. I (Investment) is defined as investments by business or households in capital. Examples of investment by a business include construction of a new mine, purchase of software, or purchase of machinery and equipment for a factory. Spending by households (not government) on new houses is also included in Investment. In contrast to its colloquial meaning, 'Investment' in GDP does not mean purchases...
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...elected on a promise to turn the deficits around. After a tough political battle in 1993, the Administration was able to deliver on that promise … The markets responded quickly to this serious effort to address the deficit by lowering expectations of future inflation, and long-term interest rates accordingly fell…. As economic growth and further restraints on spending … turned the huge deficits into surpluses, a new fiscal environment emerged. The 10-year Treasury rate fell below 6 percent in 1998 and 1999… that rate stood at only 5.7 percent in November 2000. … Ultimately, the combination of falling prices for investment goods and reduced interest costs stimulated dramatic growth in investment… investment grew 13 percent per year between the first quarter of 1993 and the third quarter of 2000. The result has been a virtuous cycle, in which the right policies in 1993 kicked off a chain reaction of smaller deficits, lower costs of capital, higher investment, increased technology in...
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...Note 1: For best reading quality, read in the print preview mode. This is necessary to read some embedded objects like formulas and some graphs as well as showing the best foramatting. Note 2: for non-honors students. The material and the order of the material may vary somewhat from that presented in the regular sequence. CHAPTER 1: CIRCULAR FLOW AND GDP The Circular Flow Model Our next economic model represents the main participants in the economy and how they interact. The two main sectors of an economy are the households and the producers. Producers make the goods and services and sell them to households, but in order to make the goods and services they first need inputs or the factors of production. There are four factors of production and each receives payment for its participation in production: labor is paid wages, capital is paid interest, land is paid rent and entrepreneurship is paid profit. There are always two directions to the flows in the economy – the money to purchase something is moving in one direction, the good or service being purchased is moving in the opposite direction. Households sell the four inputs to the production sector and receive payment back. Households then spend most of their income buying the goods and services produced by the production sector; what the households don’t spend they save. The production sector and government access those savings by borrowing in order to finance purchases. In addition both...
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...prohibition of illegal drugs affect the revenue of drug dealers? Explain. (5 points) Question 2 Use a diagram to explain A. How a tax on computers affects the market for computers. (4 points) B. How the tax affects the welfare of consumers, producers of computers and the society as a whole. (6 points) Question 3 A. In Australia, up to 50 people die each year while on the waiting list for a kidney transplant. Why, in your view, is there a shortage for kidneys? What would be your solution to the problem of kidney shortage and why do you think it would work? (10 points) Macroeconomics Question 1 A. Distinguish between nominal and real GDP. Why is real GDP the relevant concept when discussing economic growth? (4 points) B. What is the formula for calculating unemployment rate? Explain why an adult may not be counted as unemployed even though he/she is not working. (6 points) Question 2 A. Name and discuss the four main reasons why economies will always have some level of unemployment. (6 points) B. Using a diagram of the labour market, explain the effect of an increase in the minimum wage on the wage paid to workers, the number of workers supplied, the number of workers demanded and the amount of unemployment. (4 points) Question 3 A. Use an example to explain what “automatic stabilisers” are. (2 marks) B. The...
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...Introduction to Macroeconomics • LO 1: Describe the characteristics of demand and supply, and apply the demand and supply model. • LO 2: Define real gross domestic product and identify the phases of a business cycle. • LO 3: Define inflation and deflation, and explain how each affects the price and economic growth of an economy. • LO 4: Articulate why the price-level changes and how it can affect economic stability. • LO 5: Explain how unemployment is calculated and measured in the United States. • LO 6: Demonstrate an understanding of the role of the government in the economy. • LO 7: Identify the components of the macroeconomy and relate them to the circular flow diagram. Describe the characteristics of demand and supply, and apply the demand and supply model. Unit 1 http://www.saylor.org/courses/econ102/ DQ1: Self Introduction and Understanding Plagiarism. DQ2: The three primary concerns in macroeconomic analysis. Please submit your responses to DQ1 and DQ2 to the Forum Section. 2 Measuring Aggregate Output • LO 8: Describe the measurement of GDP using the expenditure approach and the income approach. • LO 9: Explain the other measures of output and income and learn their distinction from one another. • LO 10: Distinguish between the real and nominal values. • LO 11: Analyze the problems associated with using GDP as a measure of...
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...Introduction to Macroeconomics • LO 1: Describe the characteristics of demand and supply, and apply the demand and supply model. • LO 2: Define real gross domestic product and identify the phases of a business cycle. • LO 3: Define inflation and deflation, and explain how each affects the price and economic growth of an economy. • LO 4: Articulate why the price-level changes and how it can affect economic stability. • LO 5: Explain how unemployment is calculated and measured in the United States. • LO 6: Demonstrate an understanding of the role of the government in the economy. • LO 7: Identify the components of the macroeconomy and relate them to the circular flow diagram. Describe the characteristics of demand and supply, and apply the demand and supply model. Unit 1 http://www.saylor.org/courses/econ102/ DQ1: Self Introduction and Understanding Plagiarism. DQ2: The three primary concerns in macroeconomic analysis. Please submit your responses to DQ1 and DQ2 to the Forum Section. 2 Measuring Aggregate Output • LO 8: Describe the measurement of GDP using the expenditure approach and the income approach. • LO 9: Explain the other measures of output and income and learn their distinction from one another. • LO 10: Distinguish between the real and nominal values. • LO 11: Analyze the problems associated with using GDP as a measure of...
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...vital role in the development of the Indian economy. The IT outsourcing, software and call center/ BPO industries, in particular, have helped skyrocket India’s economic development in recent years. Economic development in India still depends on the various sectors that constitute the Indian economy – agriculture, services and manufacturing industries. India is rated as one of the top economies in the world in terms of purchasing power parity (PPP) of the gross domestic product (GDP) by leading financial entities of the world, such as the International Monetary Fund, the World Bank, and the CIA (as referenced in the CIA World Factbook). As far as agriculture is concerned, India is the second largest in volume of output. Certain related sectors of agriculture have played a major role in the development of the Indian economy by providing employment to a number of people in the forestry, fishing and logging industries. In 2009, the agricultural sector contributed 17.5% to the entire GDP, and more than 50% of the total labor force working in India is employed in the agricultural sector. Production volume has gone up in Indian agriculture at a consistent rate since the 1950s. Much of this improvement can be attributed to the five-year plans that were established for the development of Indian agriculture. Developments in irrigation processes, as well as various modern technologies used have contributed to the overall advancement of agricultural processes. Substantial...
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...far worse than 10 competitors A slow economy & bear market can take a bite out of investment returns Forecast business cycleapply well tied business cycle management strategies: production, inventory, HR, Marketing, capital financingmaster building an org that is keenly tuned to the business cycle Recession is a good time to market and increase brand awareness, super time to find great people to hire, most companies are in a panic and lay off great people Org culture is good because when times are tough, major decisions won’t go through unless you all agree Movement’s in business cycle is seen by the GDP GDP= Consumption (consumer confidence, retail, home sales) + Business Investment (ISM manufacturing index) + Gov Spending (fed budget balance) + Net exports (Exports- imports) (monthly trade balance) Economists always distinguish between nominal and real gdp Secular growth trend-upward sloping line Inflation rate determines nation;’s bank’s monetary policy 6 Functional areas of Corporation: -production, inventory, supply chain management -marketing and pricing Corporate finance and credit management Capital expenditures Acquisitions and divestitures HR management Keep low inventory in recession. PACCAR makes inventories smaller when it’s recessionary time Marketing & Pricing: When there’s healthy expansion, start to increase prices Mistake: whenever there’s budget cuts, they want to raise prices, the demand for their prices is often very...
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...price level. For the expansion of the early universe, see Inflation (cosmology). For other uses, see Inflation (disambiguation). Economics 2011 World GDP (PPP) per capita by country 2012 World GDP (PPP) per capita by country Index Outline Category History Types Classification History of economics Economic history (academic study) Schools of economics Microeconomics Macroeconomics Heterodox economics Methodology JEL classification codes Theory Techniques Econometrics Economic growth Economic system Experimental Mathematical Game theory National accounting By application Agricultural Behavioral Business Computational Cultural Demographic Development Ecological Education Environmental Evolutionary Expeditionary Geography Health Industrial organization Information International Labour Law Managerial Monetary / Financial Natural resource Personnel Public / Welfare economics Regional Rural Urban Welfare Lists Economists Publications (journals) Portal icon Business and economics portal v t e In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.[1] When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized...
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...the different functions of money. • Students should be familiar with the concept of money illusion. • Students should be able to identify the different monetary aggregates, especially M1 and M2, and they should know the approximate current values for M1, M2, V1, and V2. • Students should be able to identify some of the possible explanations for the increased instability of money demand the income velocity of money. • Students should be able to distinguish between the three different motives for holding money balances (transaction, precaution, and speculation). • Students should understand why the demand for money decreases with an increase in the interest rate and increases with an increase in income. • Students should know the implications of the square-root formula that is derived from the Baumol-Tobin transactions demand model. • Students should be aware that holding money has an opportunity cost. • Students should know that portfolio diversification involves a tradeoff between risk and expected return and that money is held because it is the asset with the lowest risk. Accomplishing the Objectives It is impossible to imagine a modern economy functioning without the use of money as a means of payments. Money is defined as anything that is generally...
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...Introduction to Economics: Lecture Notes Margarita Rubio IE University Fall 2012 2 3 CONTENTS 1 Introduction to Economics The Fundamentals of Economics . . . . . . . . . . . Microeconomics, Macroeconomics and Econometrics Inputs and Outputs . . . . . . . . . . . . . . . . . . Opportunity Costs . . . . . . . . . . . . . . . . . . Positive Economics versus Normative Economics . . The three Problems of Economics Organization . . The ten Principles in Economics . . . . . . . . . . . Economics as a Science . . . . . . . . . . . . . . . . How to read graphs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5 6 6 6 6 7 7 8 11 15 15 15 17 19 20 20 21 22 22 22 23 23 23 24 25 26 31 31 33 34 35 35 38 40 40 43 47 47 47 48 48 48 2 Microeconomics Supply and Demand . . . . . . . . . . . . . . . . . . . . . . . . The Demand Schedule . . . . . . . . . . . . . . . . . . . . The Supply Schedule . . . . . . . . . . . . . . . . . . . . . Equilibrium of Supply and Demand . . . ...
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