Calculating GDP

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DATA EXERCISE #1

consists of four parts

Part 1: Expenditures
Approach to Calculating GDP (weight 25% of the assignment grade)

Complete the following
exercise

Visit the Bureau of Economic
Analysis Web site at www.bea.gov Select
National, then Interactive Tables: GDP and the National Income and
Product Account (NIPA) Historical Tables, click “Beging using the data”, and
use Section 1 – Tables 1.1.5 and 1.1.6 to identify the GDP (nominal GDP) and
real GDP for the past four quarters.

a) Present the

b) Write a report (1 page
double – spaced), which contains the analysis of the results you received.

In this report consider,
but do not be limited to the following:

1.
Why was nominal GDP greater than real GDP in each of those quarters?

2.
What were the percentage changes in Nominal GDP and real GDP for the most
recent quarter?

3. What accounts for the
difference?

Part 2: Income Approach to
Calculating GDP (weight 25% of the assignment grade)

Complete the following
exercise
:

Go to http://www.bea.gov/

Find the information on GDP in
billions of current dollars for the past four quarters (in GDP and the National
Income and Product Account (NIPA) Historical Tables –click “Begin using the

data”-
choose Section 1- domestic product and income- table 1.7.5 – Create the
table that contains the following information quarterly:

Gross domestic product

Gross national product

Net national product

National income

Personal income

Write a report in your
own words
(1 page, double-spaced), which contains the analysis of the
results you received. In this report consider, but do not be limited to the
following:

1. What is the difference
between gross domestic product (GDP) and gross national product (GNP)?

2. Based on the table, what
calculations must you make to determine GNP from GDP?

3. What is national income
(NI)?

4. Which was higher in this
year, GNP or NI? By how much?

5. What calculations must you
make to determine NI from GNP?

6. What was the main component
of NI?

Part 3: GDP in Different
Countries (weight 25% of the assignment grade)

Complete the following
exercise
:

Go to World Development
Indicators database:

Choose the country in the
window on the top of the page.

 Fill in the table below. Calculate the per capita GDP for the most recent available year for the countries listed in the table with the equation given in the far right column. Country GDP (in millions of U.S. dollars) Population (in thousands) Per Capita GDP (in thousands of U.S. dollars) 1 2 3 4 = 2/3 United States Japan China Mexico Russian Federation Switzerland Sweden Luxembourg

Write a short report in
(1 page, double-spaced), which contains the analysis of the
results you have gotten. In this report consider, but do not be limited to
the following:

1.
List the countries by highest per capita GDP to lowest.

2.
Does the order remain the same for total GDP as for per capita GDP?

3. If not, explain why is it
different?

Part 4: Index of Economic
Freedom (weight 25% of the assignment grade)

Log onto the Heritage
Foundation’s website at http://www.heritage.org/Index/

“The 2011 Index of Economic
Freedom covers 183 countries across 10 specific freedoms such as trade freedom,
business freedom, investment freedom, and property rights. The 2011 Index
provides an even clearer picture of economic freedom by using data-driven
equations which allows countries to be graded between scores of 0 and 100.”

Click on RANKING to find the
rank of economic freedom. Lower rank scores indicate a higher level of economic
freedom.

Click on EXPLORE to find the

1.
Find the rank in economic freedom (overall) of the countries listed on the
table in part III of the assignment.

2.
Find the rank in business, trade, financial freedom, and property rights of the
countries listed on the table in part III of the assignment.

3. Compare the rank in economic
freedom (overall) and other indicators with the order of the countries using
the per capita GDP in the table in part III of the assignment.

Write a report in your
own words
(1 page, double-spaced), which contains the analysis of the