Economics Assignment on GDP, Unemployment, Inflation and Aggregate Demand

RUNNING Head: ECONOMICS ASSIGNMENT
Name
Professor
Institution
Economics Assignment

ECONOMICS ASSIGNMENT 2
Gross national expenditure is given by: Y=C+ I + G + (X-M)
Consumption = household consumption expenditure+ gross private domestic investment+
government consumption expenditure + (exports – imports).
Y=3125 + 900 + 520 + (680-580) = 4645 billion dollars (Summa & Serrano, 2015).
GROSS DOMESTIC PRODUCT BY MAKING USE OF THE EXPENDITURE APPROACH
This approach says that gross domestic product is equal to consumption + investment +
the government expenditure plus the exports minus the imports that is; the approach sums all the
factors incomes to the factor production. This approach is also called the value added approach
or the net product approach (Michaillat & Saez, 2015).
Y=C + I +G + (X-M)
(Consumption of Fixed Capital + Government Consumption Expenditure + Household
Consumption Expenditure) + Gross Private Domestic Investment + Government Investment
Expenditure + (Exports – Imports).
Y= (280 + 520 + 3125) + 900 + 200 + (680 -580) = 4925 Billion Dollars.
Net Domestic Product (NDP) is given by the GDP minus depreciation
NDP = GDP – depreciation i.e. 4925- 280 = 4645 billion us dollars.
GNP = consumption + investment + Government expenditure + net exports – net
imports) + (net income earned by residents from overseas investments + net income earned by
foreign residents from domestic investments) (Dewett, 2015).
Y= C + I + G + X + Z

ECONOMICS ASSIGNMENT 3
3125 + 520 + 900 + 100 + 20 = 4665 billion US dollars.
b) Current account balance = (exports – imports) + net property income paid overseas
i.e. (680- 580) + 20 = 120 Billion US dollars
Savings: GDP- Consumption Expenditure= National Savings
4925- (3125+ 520) = 1280 billion dollars (Del Negro , Giannoni , & Schorfheide, 2015)
c) Given a country has less exports than the imports, the additional value of exports will
lead to a reduced value of the economic output of this country. The nature of particular
economies and their business make the economy either export or import oriented. The nature
also leads to the determination of how changes in the net exports affect the economy (Benhabib ,
Wang , & Wen, 2015).
Net exports are used to compute the national GDP since they are the real values of the
total exports of a country. They are also used since they appropriately measure the aggregate
expenditure in an open economy.

ECONOMICS ASSIGNMENT 4
2 a) graph showing two business cycles
b) The decline of the real GDP from 600 billion to 575 is a recession. Recession
refers to the temporary decline in the economy and is a period whereby the activities of
industries are low and this is mostly identified by a fall in GDP measurably in two quarters.
c) Frictional unemployment refers to a situation whereby workers are not having jobs and
are looking for a job in a healthy economy. The fact that they might have left job voluntarily or
fired does not matter. This type is differentiated from the others because it forms a portion of the
normal labor turnover. This asymptotically arises when there is a deficiency in the aggregate
demand in an economy for it to support full employment. This type of unemployment represents