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.