Question

ECO 2013 Principles of Macroeconomics Global Citizens Assignment

In this assignment, you will examine GDP for different countries and the factors that lead to different rates of economic growth among countries and you will be asked for your economic advice. ANSWER EACH NUMBERED QUESTION SEPARATELY.

1. GDP: Calculate the values to fill in the blanks in the shaded areas of the table below:

Expenditure Components of GDP by Country, 2015 (billions of US dollars)
	Australia	Canada	Egypt	Japan	Mexico	UK	US	South Africa
Consumption	717.3	894.2	259.8	2479.1	778.0	1857.7	12283.7	189.5
Investment
Business fixed investment	316.8	367.9	45.4	1026.9	253.9	494.5	3576.6	64.8
Changes in inventories	0.9	2.1	0.0	21.0	6.1	8.2	93.4	0.4
Government	228.0	326.6	37.4	870.2	140.2	554.6	2604.9	65.0
Net Exports
Exports	231.4	490.4	41.7	773.0	404.3	777.3	2264.3	96.6
Imports	268.5	527.5	68.4	787.2	428.7	836.4	2786.3	99.8
GDP
Source: UNData, UN Statistics Division, data.un.org, GDP by Type of Expenditure at current prices – US dollars

2. Based on the information in the table and your calculations for Question #1:

Do any countries have positive net exports? ______      Which one(s)? ________________________

Which country has the largest negative net exports? ____________________________

3. Suppose that one of the countries above asks for your advice about trade. Policymakers in the country want information about the impact of trade on GDP and whether they should be concerned about negative (or positive) net exports. How would you respond?

4. Economic growth: Based on information from the World Bank, in 2016, GDP per capita was $57,467 in the United States and $59,977 in Iceland – very similar values (and high values compared to many countries). But, the annual rate of GDP growth averages 0.9% in the United States and 6.1% in Iceland.

Would you predict the United States or Iceland to have a more rapid increase in the standard of living in the long run?

                _________________    Discuss what evidence/theory from Chapter 11 you are using to support this prediction.

5. Based on information from a variety of sources, out of all countries –

Saudi Arabia ranks 26^th in healthcare while the United States ranks 31^st

Saudi Arabia ranks 95^th in the lack of civil unrest while the United States ranks 97^th

Saudi Arabia ranks behind the United States in terms of education

Saudi Arabia has investment of 30.75% of GDP while the United States is 19.754%

All of this suggests that the standards of living in the United States and Saudi Arabia are very similar - using this, answer the question below.

?6. Suppose a country with a low standard of living asks for your advice on whether it should try to emulate Saudi Arabia or the United States in pursuing its goal of increasing its standard of living. What would you advise?

Answer 1

	Australia	Canada	Egypt	Japan	Mexico	UK	US	South Africa
Consumption	717.3	894.2	259.8	2479.1	778	1857.7	12283.7	189.5
Investment	317.7	370	45.4	1047.9	260	502.7	3670	65.2
Business fixed investment	316.8	367.9	45.4	1026.9	253.9	494.5	3576.6	64.8
Change in inventories	0.9	2.1	0	21	6.1	8.2	93.4	0.4
Government	228	326.6	37.4	870.2	140.2	554.6	2604.9	65
Net Exports	-37.1	-37.1	-26.7	-14.2	-24.4	-59.1	-522	-3.2
Exports	231.4	490.4	41.7	773	404.3	777.3	2264.3	96.6
Imports	268.5	527.5	68.4	787.2	428.7	836.4	2786.3	99.8
GDP	1225.9	1553.7	315.9	4383	1153.8	2855.9	18036.6	316.5
Investment = Business fixed inventories + Change in inventories
Net Exports = Exports - Imports
GDP = Consumption+ Investment +Government +Net Exports
2) No country have positive net exports.US have the largest negative net exports.
3) Yes because the negative net exports will lead to capital outflow. This will lead to fall in the exchange rate.