1. WELCOME TO THE PRESENTATION

2. Group Members 1)Mohammad Wahidul Haque 111-11-1906 2)Abul kalam Azad 111-11-1770 3)Faruqul Islam 111-11-1779 4)Sohag Parvez 111-11-1772 5)Monjur Morshed Rahat 111-11-1774

3. In the united kingdom in 2005, Item billion of pounds Wages paid to labor 685 Consumption expenditure 791 Taxes 394 Transfer payments 267 Profits 273 Investment 209 Government expenditure 267 Exports 322 Saving 38 Imports 366 Required to calculate GDP of the year.

4. Calculation GDP in the United Kingdom Items Billions of Pounds Consumption expenditure 791 Investment 209 Government expenditure 267 Net export(export-import) -44 Total GDP 1223 GDP BY

5. Expenditure Approach Measures GDP as the sum of- 1. Consumption Expenditure (C) 2. Investment (I) 3. Government Expenditure (G) 4. Net Exports (X-M) C + G + I + NX

6. Explanation Personal consumption expenditures Gross private domestic investment Government expenditure on goods & Services Net exports of goods and services

7. Tropical Republics quantities produced and Prices(base year 2005). Quantities 2005 2006 Bananas 1000 bunches 1100bunches Coconuts 500 bunches 525 bunches Prices Bananas $2 a bunch $3 a bunch Coconuts $10 a bunch $8 a bunch

8. Tropical Republics nominal GDP in 2005 Items Quantities Prices Nominal GDP Bananas 1000 2 2000 (1000 X 2) Coconuts 500 10 5000 (500 X 10) 7000 Tropical Republics nominal GDP is $ 7000

9. Tropical Republics nominal GDP in 2006 Items Quantities Prices Nominal GDP Bananas 1100 3 3300 (1100 X 3) Coconuts 525 8 4200 (525 X 8) 7500 Tropical Republics nominal GDP is $ 7500

10. Tropical Republics real GDP in 2006 using the base year 2005 Items Quantities Prices Nominal GDP Bananas 1100 2 2200 (1100 X 2) Coconuts 525 10 5250 (525 X 10) 7450 Tropical Republics Real GDP is $ 7450.

11. The following events have occurred at times in the history of the United States. A deep recession hits the world economy. The world oil price rises sharply. U.S. businesses expect future profits to fall.

12. Explanation a) A deep recession hits the world economy Aggregate demand decreases AD curve shifts leftward from AD0 toAD1 The Economy moves from E0 to E1 Creating Recessionary Gap.

13. b) The world oil price rises sharply Short run aggregate supply decreases SAS curve shifts leftward from SAS0 to SAS1 Economy moves to the point where SAS1 intersects AD0 The price level rises to economy Real GDP decreases.

14. c) U.S. businesses expect future profits to fall Aggregate demand decreases AD curve shifts leftward from AD0 to AD 1 LAS and SAS remain unchanged The economy moves from E0 to E1 Creating output gap called recessionary gap.

15. In Japan potential GDP is 600 trillion yen and the table shows aggregate demand and short-run aggregate supply. Price Level Real GDP Real GDP demanded supplied 75 600 400 85 550 450 95 500 500 105 450 550

16. Graph of Aggregate Demand

17. Graph of Short run aggregate supply

18. Result The Potential GDP is 600 trillions of 2000 yen. The real GDP is 500 trillions of 2000 yen. Price level is 95 trillions of 2000 yen.

19. ANY QUESTION ???

20. Thank you !!!