Problem Sheet 2 Macroeconomics

PROBLEM SET 1 

2. Fill in the table

year	GDP deflator	Real GDP (billion dollars)	Nominal GDP (billion dollars)	Percentage growth in nominal GDP %	Percentage growth in real GDP  %	US populat İn millions	Real GDP per capita
1986	80,6	5489,9	4424,86	-	-	240,7	22,8
1987	83,1	5648,4	4693,8	6,1	2,9	242,8
1988	86,1	5862,9	5047,96	7,1	3,8	245,0
1989	89,7	6060,4	5436,18		3,4	247,3
1990	93,6	6138,7	5745,82		1,3	249,9
1991	97,3	6079,0	5914,87		-1	252,7
1992	100	6244,4	6244,4		2,7	255,4
1993	102,6	6383,8	6549,78		2,2	258,1
1994	105,0	6604,2	6934,41		3,5	260,1
1995	107,5	6739,0	7244,42		2	263,0

 Necessary formulas

a) GDP deflator=  (nominal GDP / real GDP)*100

nominal GDP= ( real GDP*GDP deflator ) /100

1986,     nominal GDP= (5489,9*80,6 ) /100

                                   = 4424,86

b) Percentage growth in nominal GDP= ((GDP_{this year}  -  GDP_{last year}) / GDP_{last year} )*100

1987 ,  growth nominal GDP = ( (4693,8-4424,86) /  4424,86 ) *100

                                               =6,1

c) Percentage growth in real GDP= ((GDP_n+1-GDP_n) / GDP_n )*100

Percentage growth in real GDP= ((GDP_{this year}  -  GDP_{last year}) / GDP_{last year} )*100

1987 ,  growth real GDP = ( (5648,4-5489,9) /  5489,9 ) *100

                                               =2,9

d) realGDP per capita= ( real GDP / population)

real GDP per capita for 1986 = 5489,9 / 240,7

                     =22,80

3. According to data   

	Billion dollars
Personal consumption expenditures	2460,3
Gross private domestic investment	718,9
Exports	302,4
İmports	405,1
State purchases	700,8
Depreciation	433,2
Indirect business taxes	309,5
Social security taxes	325,0
Retained earnings	63,8
Corporate profits tax liability	94,0
Net interest	307,9
Transfer payments	437,8
Personal taxes	395,1

Fill the table

Economic aggregate	Year 1	Year 2	%  Increase in nominal value
GDP	3777.3	5250.8	39
NDP	3344.1	4686.4	40.1
NI	3034.6	4249.5	10
PI	3297.5	4380.3	32.8
DI	2902.4	3787.0	30.5

GDP= C+I+G+(X-M)

GDP= 2460.3 + 718.9 + 700.8 + ( 302.4 – 405.1)

        = 3777.3

Net Domestic Product  (NDP)  =  GDP- depreciation

                                   = 3777.3 – 433.2

                                   = 3344.1

National Income (NI)  =  Net Domestic Product – indirect business taxes

                                   = 3344.1- 309.5

                                   = 3034.6

Personal Income  (PI) =  National Income – corporate taxes  -  retained earnings – social 

                                               security taxes + transfer payments + net interest

PI= 3034.6  -94.0 – 63.8 – 325.0  + 437.8 + 307.9

PI= 3297.5

Disposable Income (DI) = PI – personal Taxes

DI= 3297.5 – 395.1

DI= 2902.4