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# Kaplan MT 445 Unit 7 Assignment

Question # 00034968
Subject: Economics
Due on: 12/06/2014
Posted On: 12/06/2014 06:11 AM

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Unit 7 Assignment
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Please answer the following questions. Submit as a Microsoft Word document to the Dropbox
when completed.
Why does inflation make nominal GDP a poor measure of the increase in total production?

Which component of GDP will be affected by each of the following transactions involving
FlyCheap Airlines? If you do not believe any component will be affected, briefly explain why.

i. You purchase a ticket on a FlyCheap Airlines to visit your niece.

ii. FlyCheap Airlines purchases a new jetliner from Boeing.

iii. FlyCheap Airlines purchases new seats to be installed on a jetliner it already owns.

iv. FlyCheap Airlines purchases 200 million gallons of fuel.

v. A French citizen purchases a ticket to fly on a FlyCheap flight from Paris to New York.

vi. The city of Nashville agrees to spend funds to extend one of the runways so that FlyCheap will be able to land larger jets.

Use the table to answer the following questions.
Year

Real GDP (Billions of 2000 Dollars)

1993

\$7,113

1994

7,101

1995

7,337

1996

7,533

1997

7,836

i. Calculate the growth rate of real GDP for each year from 1994 to 1997.

ii. Calculate the average annual growth rate of real GDP for the period from 1994 to 1997.

iii. How does the average annual growth rate you calculated in (ii) above compare to the average growth rate the U.S. normally expects?

In an open economy, trade is allowed between countries. Assume a consumer purchases \$1,000 worth of furniture manufactured in China. Answer the following:

a. Which component(s) of GDP are impacted by this purchase?
b. Does GDP increase, decrease or stay the same? Briefly explain why.
c. Does your answer change if the company in China is a U.S.-owned company? Why or
why not?

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#### Kaplan MT 445 Unit 7 Assignment Solution

Tutorial # 00034298
Posted On: 12/06/2014 06:11 AM
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Kaplan_MT_445_Unit_7_Assignment_Solution.docx (39.23 KB)
Preview: its xxxxxxxx However xxx value of xxxx purchased (intermediate xxxxx is xxxxxxx xxxxxxxx in xxx final value xx the service xxxxxxxx and xxxxx xxxxxxxx in xxx GDP However xxx transaction does xxx enter xxx xxx calculation xxxxxxxx v A xxxxxx citizen purchases x ticket xx xxx on x FlyCheap flight xxxx Paris to xxx York xxx xxxxxxxx of xxx ticket will xx recorded under xxxxxxx (X) xxxxx x foreign xxxxxxx is buying xxx domestic service xxx there xxxx xx an xxxxxxxx in GDP xx The city xx Nashville xxxxxx xx spend xxxxx to extend xxx of the xxxxxxx so xxxx xxxxxxxx will xx able to xxxx larger jets xxxx will xx xxxxxx under xxxxxxxxxx expenditure (G) xxx will increase xxx GDP xxx xxx table xx answer the xxxxxxxxx questions YearReal xxx (Billions xx xxxx Dollars)1993\$7,11319947,10119957,33719967,53319977,836i xxxxxxxxx the growth xxxx of real xxx for xxxx xxxx from xxxx to 1997 xxxx is (-12)/7113= xxx 0017)x100= xxx xxxxxxxx is xxxxxxxxx 03x100= 3 xxxxxxx is 196/7337= xxxxxxxx 2 xxxxxxx xx 303/7533= xxxxxxx 4 02%ii xxxxxxxxx the.....
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