ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 15, Problem 4.9P
Sub- Part
A
To determine
the effect on the demand over time, when the economy’s real
B
To determine
the effect on the interest rate over time, when the economy’s real GDP is growing.
C
To determine
the effect on the interest rate over time, when the fed changes the money supply in order to match the money demanded.
D
To determine
the effect of the policy as discussed in part c on the stability of the economy over the business cycle.
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5. Download the Excel sheet from Brightspace. The data contains the GDP per capita and GNI
per capita of OECD member countries in 2014 (both figures are reported in US dollars). The
countries are ranked by GDP per capita.
a. Compute the ratio of GNI to GDP for each country (GNI per capita/GDP per capita). What
does this imply about net factor income from abroad for each country?
b. Rank the countries based on the GNI/GDP ratio, starting with the country with the highest
ratio and ending with the country with the lowest ratio. Which country has the highest ratio,
and which has the lowest?
c. Comment on why the countries you identified in the previous question have a large
difference between GDP and GNI? What does the difference imply?
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