1) On January 1, 2023, the capital stock in the economy of a country was valued at $975 billion. Over the year, gross investment totalling $125 billion occurred. On December 31, 2023, the market value of all the capital stock was $1,030 billion. For 1 mark each,

1. what was the gross investment in 2023? ______________.
2. what was the amount of depreciation in 2023? _______________.
3. what was the net investment in 2023? _______________.

2) For 2020, the imaginary country of Laffonia had a real GDP of $10.7 billion, and a population of 312,000. For 2021, the real GDP was $11.5 billion, and the population was 324,000.

What was Laffonia's growth rate in real GDP per capita between 2020 and 2021?

(2 marks) _____________ (indicate whether it is positive or negative)

3) Calculate the inflation rate experienced in 2020 and 2021 based on the CPI for each year below:

(.5 marks each)

Year	CPI (as of December 31 of the year)	Inflation rate (%)
2019	123.2	Not applicable for 2019
2020	124.5
2021	126.6

a) The inflation rate for the year from January 1, 2020 to December 31, 2020 was ___________.

b) The inflation rate for the year from January 1, 2021 to December 31, 2021 was ___________.

4) Assume the CPI was 108 in 2007 and 118 in 2014. Jan's wage at ABC Innovation was $60,000 in 2007 and had increased to $70,000 by 2014. After adjusting for inflation, by what percent had Jan's real wage increased from 2007 to 2014? (2 marks) _________________

5) The prices and quantities of all that is produced and consumed in a simple economy in 2022 and 2023 are shown below. Assume that the reference year is 2022 (CPI = 100) and these five goods/services are the only goods/services contained in CPI basket of goods and services.

Product	Price in 2022 ($)	Price in 2023	Quantity consumed in 2022	Quantity consumed in 2023
Hotdogs	2.25	2.45	1100	1250
Cans of pop (0.5 liter each)	1.10	1.20	7500	7700
Chocolate bars (100 grams)	1.75	1.75	3300	3300
(Magazines)	3.25	3.65	1050	1200
Movies	4.20	4.40	1000	1500

Use the table above to answer the following questions.

a) What is the simple CPI in 2023 (1 mark) ____________

b) What is the inflation rate between 2022 and 2023? (1 mark) ___________

c) What is the nominal GDP in 2023? (1 mark) ___________

d) What is the real GDP in 2023? (2 marks) ___________

6) The table below shows output and prices during 2022 (the reference year with a GDP deflator of 100) in the fictional country of Laffonia that produced only two goods (basketballs and volleyballs), and also the output and prices of these products in 2023.

	Output in 2012 Quantity	Per unit price ($) 2022	Output in 2022 Quantity	Per unit ($) 2023
Basketballs	60	16.00	65	22.00
Baseballs	15	25.00	20	28.00

Calculate the value of the GDP deflator in 2023. (1 mark) _______________

7) For 2020, a country had a nominal GDP of $20.8 billion, a GDP deflator of 105, and a population of 610,000. For 2021, the nominal GDP was as $22.5 billion, the GDP deflator was 108, and the population was 640,000.

What was the real GDP per person in 2020? (2 mark) $_______________

What was the real GDP per person in 2021? (2 mark) $_______________

8) Identify which of the four types of unemployment best describes the situation of each of the following situations. (1 mark each)

a) A wristwatch technician that repairs watches lost their job as few people are now buying watches worthwhile repairing, and most people use their cell phone to check the time. _________________ unemployment

b) A digital artist who lost their job with an advertising company during a recession in the economy. __________________ unemployment

c) A marketing manager who quit their job to look for another similar marketing job which provides a higher salary and more benefits. ___________________ unemployment

1. A ski-hill snow grooming machine operator was unemployed from March 18, 2023, to December 1, 2023.

__________________ unemployment

9) Assume the following information for the fictional country of Fantasia for 2023.

Total Population of Fantasia	24.5 million
Total population 15 years and over	20.7 million
Total labour force population	17.5 million
Labour force
Part-time workers that do not wish to have full time jobs	1.2 million
Part-time workers that wish to have full time jobs	0.90 million
Workers with full-time jobs	10.5 million
Unemployed members of the labour force	0.50 million
Discouraged workers	0.20 million

For 1 mark each, calculate:

1. The number of people in the labour force _______________
2. The unemployment rate____________
3. The labour force participation rate _____________
4. The unemployment rate that would result if the discouraged workers were included in the labour force ___________

10) Suppose that the government has an outstanding debt of $96 billion at the end of 2015. Then, in year 2016 there is a deficit of $50 billion; in 2017 there is a deficit of $70 billion; in 2018 there is a surplus of $45 billion; and in year 2019 there is a deficit of $22 billion. What is the government debt at the end of 2019? Assume all surpluses are applied toward reducing the debt and all deficits add to the debt. (2 marks) _______________

11) The imaginary country of Acordia lists the following projected revenues and outlays for 2023: $30 million in personal income tax, $22 million in corporate income tax, $8 million in indirect taxes, $2 million in investment income, $35 million in transfer payments, $14 million in government expenditures, and $4 million in interest on the debt. What is the projected budget surplus (or deficit) for 2023? Calculate the amount and indicate whether it is a surplus or deficit. (1 mark each blank)

Amount: $ _______________. Is it a surplus or deficit? (indicate which) _____________

12) Using the Bank of Canada Inflation Calculator at the site shown below, calculate what would be the price in 2024 of a house in Toronto that cost $15,000 in 1964. Assume that over those years the house increased in price each year at the rate of inflation. (1 mark each)

Note: Instructions on the use the Inflation Calculator are provided at the site.

Price in 1964: $15,000

1. Price in 2024: $ __________________

1. What was the average annual rate of inflation during the period from 1964 to 2024? ____________

Bank of Canada site:https://www.bankofcanada.ca/rates/related/inflation-calculator