 | Economics 14/e McConnell | |||||
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| Economics 14/e McConnell | |||||
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| Online Learning Center | | |||||
Chapter 10 Web-Based Questions
10-13 Web-based Question
The Multiplier—Calculate a Change in GDP The Bureau of Economic Analysis has current data on national income and product accounts at http://www.bea. doc.gov/briefrm/tables/ebr1.htm. Find the most current values for GDP 5 C 1 I 1 G 1 (X 2 M). Assume a MPC of .75 and that for each of the following the values of the initial variables are those you just discovered. What would be the new value of GDP if: (a) Investment increased by 5 percent? (b) Imports increased by 5 percent and exports increased by 5 percent? (c) Consumption increased by 5 percent? (d) Government spending increased by 5 percent? Which 5 percent increase caused GDP to change the most in absolute dollars?
10-14 Web-based Question
Net Exports—What Is the Current Economic Impact? Positive net exports have an expansionary effect on domestic GDP; negative net exports have a contractionary effect. Check the latest monthly figures at the Bureau of Economic Analysis http://www.census.gov/ftp/ pub/indicator/www/ustrade.html for exports and imports of goods and services. Assume a multiplier of 4. Compared to the previous month how much is GDP increased or decreased by a change in (a) net exports of goods (b) net exports of services and (c) net exports of goods and services? Which has the greatest impact? Should services be included or excluded from net exports?
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