Economics Study Material

Running head: ECONOMICS
Economics
Name of the student
Name of the university
Author note

ECONOMICS
Section A
Answer 1
The consumer price Index of the New Zealand is known to examine the price changes of the
given basket of services as well as goods of the economy.
The consumer price Index is known to be calculated as
CPI= Price of desired basket ∈current year
Price of desired basket ∈base year × 100
Answer 2
Answer a
From the table given the gross domestic product is calcutaed by the expenditure method which
is the summation of consumption, investment, net exports and the government expenditure.
Therefore, the result will be
23100+9500+ 6200+(13300−15100) = 3700
Therefore, the gross domestic product is 3700.
Answer b
The national income figures of the gross domestic product does not capture the true economic
activity of the country since it does not comprise of the transactions taking place in the informal
market. The national income figures also do not capture the level of existing income inequality
of the country.

ECONOMICS
Answer c
The nominal gross domestic product is known to evaluate the values of goods as well as services
of the present year price which is known to represent the monetary values of the output of the
present year. On the other hand the real gross domestic product is known to estimate the values
of output at the fixed prices of the base year. this is known to provide a measure which is
inflation adjusted to the national estimates. In order to find the gross domestic product in the
present year prices in terms both real as well as nominal gross domestic product.
Answer d
The real gross domestic product per capita is the inflation adjusted total economic output in the
country that has been produced by an individual. It also shows the welfare of the individual of
the country or it shows the standard of living in the country.
Answer e
The two measures of the gross domestic product are the Human Development Index and the
Genuine Progress Index. The human development Index (HDI) is a statistic composite index of
the life expectancy, per capita income and education indicators which is used for ranking
countries in to the tiers of the human development.
A genuine progress indicator is a kind of metric which is used for measuring the economic
growth of the country which is used as the measurement for gross domestic product.
Section B

ECONOMICS
Answer 1
When the migration have increased in New Zealand there will be a rise in the labour supply in
the country. When the migration will increase, the aggregate demand curve will be shifting to
right and will therefore move from AD1 to AD2. The increased labour force in the economy due
to immigration will be increasing the labour force employed over time which will also add
productivity of the country. This will then increase the supply of output. For this reason, the
aggregate supply curve will be shifting to the right. The aggregate supply curve will therefore
AS2
AS1
Q2
Price Level
Output
AD1
AD22
P
Q1