Question

The Data of Macroeconomics — End of Chapter Problem

Obtain the percentage of GDP accounted for by each of the four components of GDP for 1976, 1996, and 2016. Data on the size of the components of GDP in the Canadian economy can be found at the GlobalEconomy.com. Specifically, you will seek data on

• Personal consumption expenditures ("Household consumption, percent of GDP")
• Gross private domestic investment ("Capital investment, percent of GDP")
• Government purchases ("Government spending as percent of GDP")
• Net exports ("Trade balance as percent of GDP")

a. Fill in the accompanying table with the appropriate values.

	1976	1996	2016
Personal consumption expenditures	65.2% 47.5% 54.3%	61.3% 76.5% 56.6%	47.3% 58.7% 45.6%
Gross private domestic investment	27.3% 25.2% 28.9%	25.6% 18.1% 19.0%	22.9% 21.9% 25.8%
Government purchases	20.8% 22.6% 22.1%	22.1% 20.9% 19.9%	20.8% 17.6% 20.2%
Net exports	-1.11% -0.78% -0.90%	1.24% -0.23% 3.93%	-1.14% 1.56% -2.41%

b. Use these data to determine whether the following four statements are true or false.

A. Personal consumption has consistently been the dominant component of GDP.

B. Canada has become a net exporter in recent Years.

C. Domestic investment has been volatile compared with personal consumption ad government purchases

D. Government purchases have tended to hover at around 15% of GDP

Answer 1

b  

A. TRUE,

Personal consumption has consistently been the dominant component of GDP in three periods

B.FALSE , shows negative net exports trend

C.TRUE , Domestic investment has been volatile compared with personal consumption ad government purchases from 1976 to 2016. government purchase remain consistent and personal consumption hold dominant position

D. FALSE Government purchases have tended to hover at more than 15% -20% of GDP