Tutorial

Tutorial 1
1. Why do economists use real gross domestic product rather than nominal gross domestic product to gauge economic social welfare?

2. Why is it desirable for a country to have a large gross domestic product? Give an example of something that would raise GDP and yet be undesirable.


3.What components of GDP (if any) would each of the following proceeding affect? rationalize.
(a) A family gets a new refrigerator
(b) Aunt Jorah buys a new house]
(c) PROTON sells a Perdana from its inventory
(d) You buy a roti canai
(e) PLUS repaves North-South Highway
(f)Your parents buy a bottle of French wine
(g) Toyota expands its factory in Shah Alam, Selangor.

4. downstairs are some data from the land of milk and honey.





|twelvemonth |Price of Milk |Quantity of Milk (litre) |Price of dulcorate |Quantity of Honey (litre) |
| two hundred6 |$1 |100 |$2 |50 |
|2007 |$1 |200 |$2 |100 |
|2008 |$2 |200 |$4 |100 |

a) Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2006 as the base year.
b) Compute the plowshare change in nominal GDP, real GDP, and the GDP deflator in 2007 and 2008 from the preceding year. For each year, identify the variable that does not change. Explain in words why your answer makes sense.
c) Did economic well-being rise more in 2007 or 2008? Explain.

5.A sodbuster grows wh tire, which he sells to a miller for $100. The miller turns the wheat into flour, which he sells to a baker for $150. The baker turns the wheat into bread, which he sells to consumers for $180. Consumers eat the bread.
(a) What is the GDP in this economy? Explain.
(b) Value added is defined as the value of a...If you want to get a full essay, dedicate it on our website: Orderessay



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