Question

MUST BE 2017

Data exercise #1

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

Complete the following exercise

Visit the Bureau of Economic Analysis website at www.bea.gov. From the drop-down menu under “Data”, click on “by Economics Account”. Then click on “National”, “Gross Domestic Product, and “Full Release and Tables”. Use table 3 (Gross Domestic Product: Level and Change from Preceding Period). The left columns are nominal GDP (and its components) and the right half represents real GDP (chained 2012 dollars)

a) Create the table that contains the following information for the last quarter. You need this information from both parts of the table 3- (nominal GDP (and its components) from left columns and real GDP (chained 2012 dollars) from the right part of the table 3). Omit the intermediate lines found in Table 3 on the web site.

Gross domestic product

Personal consumption expenditures

Gross private domestic investment

Net exports of goods and services

Government consumption expenditures and gross investment

1. b) Calculate the percentage (the proportion) of each category in nominal GDP and in real GDP.

Using Nominal GDP:

[Personal consumption expenditures / Nominal GDP]*100%

[Gross private domestic investment / Nominal GDP]*100%

[Net exports of goods and services / Nominal GDP]*100%

[Government consumption expenditures and gross investment/ Nominal GDP]*100%

And using Real GDP:

[Personal consumption expenditures / Real GDP]*100%

[Gross private domestic investment / Real]*100%

[Net exports of goods and services / Real GDP]*100%

[Government consumption expenditures and gross investment/ Real GDP]*100%

Present the information that you received in 1 (a) and 1 (b) as a table(s) in your project.

2. Write a report (2 pages double - spaced), which contains an analysis of the results you received.

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

1. Why was the nominal GDP greater than the real GDP? By how much?
2. GDP is composed of a number of categories. What category makes up the largest portion of GDP? What category makes up the smallest portion of GDP?
3. What is “Gross private domestic investment”? What does gross private domestic investment measure?
4. What is “Net exports of goods and services”? Why it is negative?
5. In the left part of the table 3 (nominal GDP) find the category “National defense”. How much was the National defense for the last quarter? Calculate percentage of National defense out of “Government consumption expenditures and gross investment”. Calculate percentage of National defense out of GDP.
6. Please analyze and discuss the significance of the data that you received for this Data exercise. Reflect on what you have learned from this exercise.

Answer 1

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