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Assignment: Macroeconomics and Business Environment

This document contains instructions for an assignment on macroeconomics and business environment. It asks the student to: 1) Calculate nominal GDP, real GDP, GDP deflator, and inflation rate for two years based on production and price data for goods A and B. 2) Briefly discuss the components of GDP: consumption, investment, government spending, and net exports. 3) Analyze a graph showing aggregate supply and demand curves to identify equilibrium output levels and explain shifts that could occur.

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Atul Tripathi
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27 views

Assignment: Macroeconomics and Business Environment

This document contains instructions for an assignment on macroeconomics and business environment. It asks the student to: 1) Calculate nominal GDP, real GDP, GDP deflator, and inflation rate for two years based on production and price data for goods A and B. 2) Briefly discuss the components of GDP: consumption, investment, government spending, and net exports. 3) Analyze a graph showing aggregate supply and demand curves to identify equilibrium output levels and explain shifts that could occur.

Uploaded by

Atul Tripathi
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment: Macroeconomics and Business Environment

1. Assume that there are only two goods in the market i.e. A & B. On the basis
of following information , calculate (8 marks)
(a) Nominal GDP for both the years.
(b) Real GDP for 2014
(c) GDP deflator for 2014
(d) Rate of inflation for 2014
Year

No. of units of
good A
produced
1000
1250

2013
2014

Price of good
A/unit
40
44

No. of units of
good B
produced
50000
55000

No. of units of
good B
produced
6
7

2. Briefly discuss about the following components of GDP: (8 marks)


a. Consumption
b. Investment
c. Government spending
d. Net Export
3. Use the graph below to answer the following questions: (8 marks)
a. What does the distance OA represent? Briefly discuss and explain what events
could occur in
this model which would cause the distance OA to decreases.
b. Briefly explain what the following distances represent: OY1 , Y1 E, Y1 F. Is the
economy in
equilibrium when output equals Y1? Explain.
c. Briefly explain what the following distances represent: OY2, Y2B, Y2C. Is the
economy in
equilibrium when output equals Y2? Explain.
d. Given your analysis in parts (b) and (c), what is the level of equilibrium output?
Z

F
E

C
A

0
Y2

Y1

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