Calculating GDP and economic growth worksheet PDF

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Macroeconomics...

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Calculations you need to know for GDP and economic growth* *In Foundation Year Economics You will need to understand and be able to calculate GDP using the expenditure approach: Gross Domestic Product = Consumption + Investment + Government + (Exports – Imports) GDP = C + I + G + (X – M) You will also need to understand how economic growth of an economy from one period to the next can be determined using GDP data. Economic growth = change in real GDP / previous year's real GDP x 100 = % growth You will NOT need to know how to convert Nominal GDP to real GDP, but you do need to understand the meanings of each of these measures. Refer to your glossary and to your eBook module for the topic of economic growth and practise calculating GDP and economic growth by answering the questions below: 1. Refer to Table 1 and answer the questions that follow: Table 1: Economic Indicators for Country Z in 2015/16 Item

$ billions

Household consumption expenditure

180

Private (firms) investment expenditure

150

Public (government) investment expenditure

125

Government consumption

95

Transfer payments

25

Exports

45

Imports

65

Calculate Country Z’s GDP for 2015/16. GDP= $ [180+150+125+95+(45-65)] billions = $ 530 billion

2. Refer to Table 2 and answer the questions that follow: Table 2: Real GDP data for Country K

Year Real GDP ($billions per year)

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

560

578

610

633

670

693

2016/17 712

Calculate annual economic growth for each of the following years. The first one has been completed for you.

2011/12: Economic growth = change in real GDP / previous period's real GDP x 100 = …… % growth = (578 – 560) / 560 x 100 = 18 / 560 x 100 = 3.21% 2012/13: Economic growth = (610-578) / 578 x 100% = 5.54% 2013/14: Economic growth = (633-610) / 610 x 100% =3.77% 2014/15: Economic growth = (670-633) / 633 x 100% = 5.85% 2015/16: Economic growth = (693-670) / 670 x 100% = 3.43% 2016/17: Economic growth = (712-693) / 693 x 100% =2.74%...