This is a four part homework assignment.

Part 1:There are two formulas for the Gross Domestic Product.The one used most often is the expenditure approach.It is given as follows:

GDP = C + I + G + NX

There are two formulas for the Gross Domestic Product.The one used most often is the expenditure approach.It is given as follows:

GDP = C + I + G + NX

Define the variables in the equation and give a specific example for each of them with the exception of GDP.

Given the table below, what would the GDP be using the Expenditure approach?Note, there are more values given than needed to do the calculation.

Dollars (millions)

Gross private investments

148

Interest income

100

Business profits

150

Rental income

127

Depreciation

32

Indirect business taxes

124

Household consumption

300

Transfer payments

89

Wages

65

Government purchases

123

Net Foreign Factor Income

12

Exports

57

Imports

30

The other way to calculate the GDP is the Income Approach.In this approach you add up all the income that resulted from selling all final goods and services produced in a given year.That formula is written as:

GDP = Income from Rent + Income from wages + income from interest + income from profit

IF you would like, but not necessary, calculate the GDP using the Income formula.Although you will get similar answers, that is not always the case.

Part 2: Place all items for Part 2 on the same graph.For each scenario below, state if there has been a change in quantity supplied or a change in supply for the item in question.Starting by drawing a supply curve and then indicate using arrows and, if necessary, drawing a new curve to illustrate what happens.Be sure to also write down in words what occurs with each scenario. Note, a, b, c, and d will all be on one graph.

a) The market price of rubber is rising. Will there be a change in quantity supplied or change in supply of car tires?

b) The market price of steel is rising. Will there be a change in quantity supplied or change in supply of steel?

c) The number of Android phones has tripled. Will there be a change in quantity supplied or change in Android phones?

d) The price of Nike athletic shoes decreases. Will there be a change in quantity supplied or change in Nike athletic shoes?

e) The price of coffee beans decreases. Will there be a change in quantity supplied or change in tea?

Part 3:Place all items for Part 3 on the same graph.For each scenario below, state if there has been a change in quantity demanded or a change in demand for the item in question.Starting by drawing a demand curve and then indicate using arrows and, if necessary, drawing a new curve to illustrate what happens.Be sure to also write down in words what occurs with each scenario. . Note, a, b, c, and d will all be on one graph.

a) The price of sugar increase, will there be a change in quantity demanded or change in demand of baked goods?

b) The price of coffee rises. Will there be a change in quantity demanded or change in demand of tea?

c) The unemployment rate has increased to the highest in ten years. Will there be a change in quantity demanded or change in demand of new cell phones?

d) The price of iPhones decrease. Will there be a change in quantity demanded or change in demand of iPhones?

e) The cost of almonds increased. Will there be a change in quantity demanded or change in demand of almonds?

Part 4:Define the following:

1. Macroeconomics (from Chapter 16)
2. Macroeconomic policy
3. Inflation
4. Fiscal policy
5. Aggregation
6. Standard of living
7. Recession
8. Expansion