Economics 302 4 Week Summer Session 2006 Homework 1 Due Thursday June 1 2006 5 30 06 Homework will be graded for content as well as neatness Sloppy or illegible work will not receive full credit This homework requires the use of Excel which is a spreadsheet program 1 point will be awarded for general neatness legibility etc 1 a 1 2 point Using Excel replicate the following table and then calculate the missing cell values using an Excel formula this is obviously simple to do by hand but the point is to start with an easy assignment with excel and build your skills The following table is based on the Survey of Current Business August 2000 Note all numbers for Nominal GDP consumption gross investment government purchases of goods and services and net exports are in billions of current dollars Year Nominal Consumption Gross Government Net Exports GDP Investment Purchases of Goods and Services 1929 77 5 16 7 9 4 0 4 1933 56 4 45 9 8 7 0 1 1939 92 0 67 2 9 3 14 7 1945 223 0 119 8 10 8 0 9 1980 2795 6 1762 9 477 9 569 7 1990 3831 5 861 7 1181 4 71 4 1999 9299 2 1650 1 1634 4 254 0 Now using an Excel spreadsheet calculate the following for your answers provide your Excel spreadsheet with the calculated values please make sure the columns are clearly identified b 1 2 point Consumption each year as a percent of nominal GDP for that year c 1 2 point Gross Investment each year as a percent of nominal GDP for that year d 1 2 point Government Purchases of Goods and Services each year as a percent of nominal GDP for that year e 1 2 point Net Exports each year as a percent of nominal GDP for that year 2 You are given the following information about the U S economy in 1999 all numbers are in billions of 1999 dollars and are taken from the Survey of Current Business August 2000 Gross Domestic Product equals 9299 2 Gross National Product equals 9288 2 earnings in the United States by foreign residents and firms equals 316 9 Net National Product equals 8127 2 Indirect Business Taxes equals 657 5 Corporate Profits equals 856 0 Proprietors Income equals 663 5 Rental Income of Persons equals 143 4 Net Interest equals 507 0 Corporate Profits equals 485 7 assume this figure accounts for all dividend transactions and includes retained earnings Contributions to Social Security equals 667 2 Personal Interest Income equals 456 6 Personal Taxes equals 1152 0 and Personal Disposable Income equals 6637 6 a 1 point What is the value of foreign earnings of U S residents and firms in 1999 b 1 point What is the value of depreciation in the U S economy in 1999 c 1 point What is the value of National Income in the U S economy in 1999 d 1 point What is the value of Compensation of Employees in the U S economy in 1999 e 1 point What is the value of Transfer Payments to Persons in the U S economy in 1999 Assume that net interest has already been accounted for in the above figures f 1 point What is Personal Income in the U S economy in 1999 3 a 1 point Calculate the missing values for the following table Year 1960 1970 1980 1990 1999 Nominal GDP Billions of Current Dollars 527 4 2795 6 5803 2 Real GDP Billions of 1996 Dollars 3572 8 4904 6 6708 9 8875 8 Implicit GDP deflator 22 2 29 1 104 8 b 1 point Now using the values you calculated in a calculate the percentage change in nominal GDP and the percentage change in real GDP for 1960 1970 1970 1980 1980 1990 and 1990 1999 Use Excel to make these calculations and provide your answer in a well labeled excel spreadsheet c 1 point Now provide an interpretation of the results you got in part b
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