Question

**This question has been asked and answered once already with OLD data, please note you will need to visit the website below as stated in the question or go by the table/chart provided at the bottom**

Visit the Bureau of Economics 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 GDP]*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) asa table(s) in your project.

2. Answer the following based on table 3 and data:

   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 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 can be learned from this exercise.

December 21, 2018 Table 3. Gross Domestic Product: Level and Change From Preceding Period--Table Ends Bilions of dollars Seasonally adjusted at annual rates 2017 Billions of chained (2012) dollars Seasonally adjusted at annual rates riod Line 2017 2017 2018 2017 2018 Q3 Q4 QQ Q3 Q3 Q4 QQ Q3 Q2 Q3 50 Government consumption 51 Federal 52National defense 53 Consumption expenditures 54Gross investment 55 Nondefense 56 Consumption expenditures 57 Gross investment 8State and local 59Consumption expenditures 60 Gross investment 61 Residual expenditures and gross investment 3,374.4 3,372.3 3,419.1 3,456.8 3,506.6 3,550.53,130.4 3,121.8 3,140.2 3,1522 3,171.8 3,192.0 2.1 19.6 20.2 50 1,265.2 1,263.8 1,280.6 1,294.8 1,313.0 1,329.51,196.4 1,193.2 1,205.2 1,213.1 1,224.0 1,234.7 8.6 10.9 10.6 51 743.9 743.1 750.7 759.0 7726 784.3713.8 712.3 717.5 722.8 733.3 7422 4.6 10.5 8.8 52 594.0592.3 598.5 606.6 6184 628.6566.9 564.7 568.9 574.4 583.7 591.8 3.7 9.3 8.1 53 149.9 150.8 152.3 152.4 154.2 155.747.047.8 148.7 148.6 149.8 50 851.2 0.7 54 521.3 520.7 529.8 535.8 540.4 545.2481.9 480.3 487.0 489.5 490.1 492.0 3.9 0.6 1.9 55 392.8 392.4 399.5406.0 409.5 127358.6 357.5 362.6 366.3 366.4 367.5 2.0 0.2 1.0 56 128.5 128.3 130.4 129.8 131.0 1325 23.3 122.8 124.4 123.2 123.6 124.5 19 0.4 0.9 57 2,109.2 2,108.5 2,138.5 2,162.0 2,193.5 2,221.0 1,932.3 1,926.9 1,933.5 1,937.7 1,946.61,956.3 -10.5 8.8 9.758 1,744.5 1,747.5 1,768.0 1,784.4 1,803.1 1,822.8 1,595.4 1,594.91,594.5 1,595.3 1,597.9 1,603.0 -0.8 2.5 5.1 59 364.8 361. 370.5 377.6 390.5 398.2 336.8 331.9 339.0 342.4 3487 3533 -9.7 6.3 4.6 60 Addenda 62Gross domestic income (GDI) 63 Average of GDP and GDI 64 Final sales of domestic product 65Gross domestic purchases 66 Final sales to domestic purchasers20,038.3 20,089.9 20,418.3 20,643.9 20,972.1 21,219.0 18,839.8 18,863.3 19,051.0 19,141.3 19,330.8 19,471.6 452.6 189.5 140.8 66 67 Final sales to private domestic 9,628.6 19,702.5 19,908.5 20,201.0 20,410.5 20,701.9 18,183.3 18,226.7 18,294.2 18,470.2 18,510.3 18,704.5 404.3 40.1 194.2 62 19,557.0 19,645.3 19,870.2 20,121.0 20,411.2 20,680.1 18,117.0 18,173.8 18,259.0 18,397.1 18,510.9 18,684.7 397.9 113.9 173.8 63 9,459.9 19,532.7 19,810.4 20,004.7 20,422.3 20,565.5 18,008.7 18,042.6 18,186.5 18,274.4 18,515.9 18,562.1 391.1 241.6 46.2 64 20,063.8 20,145.3 20,439.7 20,680.2 20,961.7 21,311.7 18,881.0 18,941.2 19,0874 19,190.2 19,324.8 19,574.7 453.0 134.6 249.9 65 16,663.9 16,717.6 16,999.2 17,187.0 17,465.5 17,668.5 15,713.5 15,745.8 15,915.4 15,993.7 16,163.9 16,284.6 455.8 170.2 120.7 67 19,485.4 19,588.1 19,831.8 20,041.0 20,411.9 20,658.2 18,050.7 18,120.8 18,223.8 18,324.0 18,511.6 18,665.0 391.5 187.6 153.4 68 purchasers 68 Gross domestic product 69Plus: Income receipts from the rest of the world 957.1979.6 1,024.5 1,063.2 1,078.6 1,071.5900.8 920.7 9572 989.6998.1 987.1 77.2 8.5-11.0 69 70 Less: Income payments to the rest of the world 713.4 724.6 753.7 794.4 811.6 816.5667.5 677.2 699.6 731.3 742.6 743.7 52.0 113 1. 70 19,729.1 19,843.0 20,102.6 20,309.8 20,678.9 20,913.3 18,284.0 18,364.1 18,480.8 18,581.5 18,766.4 18,908.0 416.3 184.9 141.6 71 16,369.2 16,453.3 16,667.9 16,837.6 17,158.1 17,360.5 15,092.0 15,150.1 15,230.7 15,309.0 15,472.0 15,600.7 301.9 163.0 128.7 72 71 Equals: Gross national product 72 Net domestic r Revised 1. Real gross domestic income is gross domestic income deflated by the implicit price defator for gross domesic product. Note. Users are cautioned that particularly for components that exhibit rapid change in prices relative to other prices in the economy, the chained-dollar estimates should not be used to measure the components relative importance or its contribution to the growth rate of more aggregate series. For accurate estimates of the contributions to percent changes in real gross domestic product, use table 2 Source: U.S. Bureau of Economic Analysis

Answer 1

1.

The table is constructed as below

	Nominal	Real	percentage (the proportion) in nominal GDP	percentage (the proportion) in real GDP
	2018	2018
	Q3r	Q3r
Gross domestic product (GDP)	20658.2	18665
Personal consumption expenditures	14050.5	12953.3	68.0%	69.4%
Gross private domestic investment	3710.7	3436.2	18.0%	18.4%
Net exports of goods and services	-653.5	-949.7	-3.2%	-5.1%
Government consumption expenditures and gross investment	3550.5	3192	17.2%	17.1%

==================================================================================

2.

• a) Nominal GDP is the dollar value of goods and services produced within the economy during a particular year measured in current year prices. The nominal GDP does not account for inflation, the persistent increase in price level time to time. Real GDP is the value of goods and services measured in costant prices. Constant prices means the value is calculated in some base year prices. Real GDP accounts for the price level and as inflation is increasing the real GDP is always lower the nominal GDP. This implies the fact that the prices in current year is higher than base year by some margin.
  In this case, the nominal GDP is higher than real GDP in 2017 Q3 by $1993.2 billion.
• b) The largest portion of GDP is the personal consumption expenditure, which is almost 70% of the GDP. The smallest portion of GDP is the net export which is 5% of the GDP.
• c) Investment is the most volatile part of GDP. The gross private domestic investment is the expenditure by firms including unsold inventories. This comprises of fixed investment and change in inventories.
• d) The net export is the value of trade in goods and services by the economy over a year or a particular period of time. The net export is the value of goods and services sold abroad over the value of goods and services bought from abroad. That is it is an export minus import. The value of net export is negative if the import of the economy is higher than its export. That is if domestic residents buy more than it sells abroad the net export becomes negative.
• e) National defense is $784.3 billion. It is almost 22% of government expenditure and 4% of GDP.