UNIT 1 - BU204 - MACROECONOMICS Unit 1 Assignment Template: The Big Picture, Tracking the Macroeconomy Name: BU204-Section: Date: General Instructions for all Assignments 1. Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format: Course number section number Last name First name_Unit number. Example: BU204 Section02_David_Alex Unit 2. At the top of the template, insert: Your Name, Course Number and Section (BL204-Section Ox), and the Date. 3. Insert your answers below each question or in the appropriate space provided for in the question. Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions. 4. Your answers should follow current APA format with citations to your sources, include a list of references at the bottom of your last page, be in Standard English with correct spelling, punctuation, grammar, and style, a. b. c. d. be double-spaced, 2. f. be formatted in Times New Roman, 12-point, black font, and respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions. 5. Upload the completed assignment to the appropriate unit Dropbox. 6. Direct any questions about the assignment to your course instructor. Assignment This assignment addresses how economists measure various nations' economies using measures such as Gross Domestic Product (GDP). In doing so, it highlights the various components of the GDP, the difference between nominal and real GDP, and the limitations of the GDP as a measure of national income. 1) U.S. real GDP is substantially higher today than it was 60 years ago. What does this tell you, and what does it not tell you, about the well-being of U.S. residents? What are the limitations UNIT 1 - BU204 - MACROECONOMICS of the GDP as a measure of economic well-being? Given the limitations, why is GDP usually regarded as the best single measure of a society's economic well-being? (Enter response here.) 2) What is an intermediate good? How does an intermediate good differ from a final good? Explain why the value of intermediate goods produced and sold during the year is not included directly as part of GDP. Explain why the value of intermediate goods produced and not sold is included directly as part of GDP. (Enter response here.) 3) GDP is defined as the market value of all final goods and services produced within a country in a given period of time. As we covered in the previous question, intermediate goods are not included in GDP. However, that is not the only production that is left out of GDP. Explain why some final goods and services, other than intermediate goods, are not included in GDP. (Enter response here.) 4) The table below contains hypothetical data for country A for a given year. 2 UNIT 1 - BU204 - MACROECONOMICS Country A's Goods and Services Household purchases of durable goods Household purchases of nondurable goods Total $1293 $1717 Household purchases of services $301 Household purchases of new housing $704 Purchases of capital equipment Inventory changes $310 5374 $611 $117 $1422 Government expenditures on public works $553 Transfer payments STTI Foreign purchases of domestically produced goods 588 Domestic purchases of foreign goods $120 Purchases of new structures Depreciation Salaries of government workers Refer to the Table above to answer the following questions. Be sure to show all of your calculations. a. What was country A's GDP? (Enter response here.) b. What was country A's consumption? (Enter response here.) c. What was country A's investment? (Enter response here.) d. What were country A's government purchases? (Enter response here.) UNIT 1 - BU204 - MACROECONOMICS e. What were country A's exports and imports? What was the net export? (Enter response here.) 5) Calculate how much each of the following items is worth in terms of today's dollars using 180 as the price index for today. a. In 1925, the CPI was 18 and the price of a movie ticket was $0.30. (Enter response here.) b. In 1930, the CPI was 14 and a cook earned $20 a week. (Enter response here.) c. In 1940, the CPI was 16 and a gallon of gas cost $0.20. (Enter response here.)