MODULE 3 HOMEWORK
Covering Chapters 10 – 13
Worth 50 points – Due on date posted on syllabus and online.
Answer each of the three questions in the corresponding text boxes. Answer all parts of each question. Just begin typing the boxes; they will expand according to how much you write. There is no minimum amount of writing necessary. Just answer each question completely and you will be fine!
1. GDP gap and expenditure gap The St. Louis Federal Reserve Bank at www.research.stlouisfed.org/fred2 provides data on both real GDP (chained 2000 dollars) and real potential GDP for the United States. The easiest way to get to the data is to just search in the search box for GDP and potential GDP. What was potential GDP for the third quarter of 2010? What was the actual level of real GDP for that quarter? What was the size difference between the two—the negative GDP gap?
2. Feeling wealthier; Spending more? Access the Bureau of Economic Analysis Web site, www.bea.gov, interactively. Select “Survey of Current Business,” which is listed under Publications. On that page, select “National Data” under “Charts Tables More” “National Income and Product Accounts.” Go to the List of All NIPA Tables and then find Section 1, Table 1.1.6, which will give you access to real GDP figures for the U.S. economy. Find the annual levels of real GDP and real consumption for 2005 and 2006. Did consumption increase more rapidly or less rapidly in percentage terms than real GDP?
3. The recession of 2007-2009—Which component of AD declined the most? Use the interactive feature of the Bureau of Economic Analysis Web site, www.bea.gov, to access the National Income and Product Account Tables. Follow the instructions above to get to the same Table. From Table 1.1.6 find the levels of real GDP, personal consumption expenditures (C), gross private investment (Ig), net exports (Xn), and government consumption expenditures and gross investment (G) in the first and third quarters of 2008. By what percentage did real GDP decline over this period? Which of the four broad components of aggregate demand decreased by the largest percentage amount?
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