macroeconomics There are probably a thousand macro economic indicators, some mea

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macroeconomics

There are probably a thousand macro economic indicators, some measure the overall national economy, some are more limited in scope. The three most often quoted and publicized are the Gross Domestic Production Index (GDP), the Consumer Price Inflation Index (CPI) and the Unemployment Index. Please complete the short answer questions regarding these three indicators:

1. Use the table below:

Table 6-1

Value (in billions)

Personal consumption expenditures

$1,000

Gross private domestic investment

$500

Net exports

$300

Imports

$180

Government purchases of goods and services

$280

Transfer Payments

$90

a. What is the value of GDP?

b. In each of the following cases, indicate if GDP is affected, under what category and what happens to GDP. Be sure to explain why or why it is not included.

- You buy a used textbook from one of your classmates.

- You buy a new umbrella.

- Ella, a French tourist, has a haircut in a salon in San Francisco.

- Oklahoma cleans up after a devastating tornado.

- A pension payment to a retired military person

2. Why do some people gain and other people lose from inflation and deflation?

3. Define the natural rate of unemployment. Identify three factors that may cause the natural rate to change over time.

4. What is structural unemployment? State the various reasons due to which it can arise in an economy.

USE THE CHART TO ANSWER THE ABOVE QUESTION!!!!!!!!!!

Please write a 4-5 page paper with your answers. Answers must be original and answer the question completely. I will rate the best answer. Thank you

Value (in billions)

Personal consumption expenditures

$1,000

Gross private domestic investment

$500

Net exports

$300

Imports

$180

Government purchases of goods and services

$280

Transfer Payments

$90

Explanation / Answer

1. Assume that consumer spending is $1,000, government expenditures are $280, investments by industry are $500, and the excess of exports over imports is $120.

a. What is the value of GDP?

Y = C + I + E + G

Y = GDP

C = Consumer Spending (1000)

I = Investment made by industry (500)

E = Excess of Exports over Imports (120)

G = Government Spending (280)

$1,900 = 1,000 + 500 + 120 + 280

b. In each of the following cases, indicate if GDP is affected, under what category and what happens to GDP. Be sure to explain why or why it is not included.

If I buy a used textbook from one of my classmates, then it will not affect the GDP. This is because it has already been included in previous GDP and hence will not be included in the current year

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