Question

The table below shows data on population and expenditures in five countries, as well as the value of home production, the underground economy, and environmental externalities in each. Note all figures are expressed in millions of dollars.

    a. Calculate GDP and GDP per capita in each country.

    b. Calculate the size of home production, the underground economy, and environmental externalities in each country as a percentage of GDP.

    c. Calculate total and per capita “GDP plus” in each country by including the value of home production, the underground economy, and environmental externalities.

    d. Rank countries by total and per capita GDP, and again by total and per capita “GDP plus.” Compare the two lists. Are the biggest and the smallest economies the same or different?

Country	C (millions)	I (millions)	G (millions)	Net exports (millions)
Bohemia	$9,800	$230	$950	−$120
Silesia	$450	$78	$100	$13
Bavaria	$2,125	$319	$597	$134
Saxony	$2,750	$75	$1,320	−$45
Ottoman Empire	$6,225	$567	$1,435	$1

Country	Population(millions)	Home production (millions)	Underground economy (millions)	Environmental externalities (millions)
Bohemia	1.200	$1,250	$5,770	−$1,560
Silesia	0.160	$75	$128	−$45
Bavaria	0.425	$386	$1,450	−$523
Saxony	0.760	$146	$250	−$820
Ottoman Empire	0.800	$432	$654	−$396.3

Country	GDP(millions)	GDP per capita	Home production as a % of GDP	Underground economy as a % of GDP	Environmental externalities as a % of GDP	GDP plus(millions)	GDP plus per capita
Instructions: Round your answers to the nearest whole number.			Instructions: Round your answers to one decimal place.			Instructions: Round your answers to the nearest whole number.
Bohemia
Silesia
Bavaria
Saxony
Ottoman Empire

Answer 1

Country	C (millions)	I (millions)	G (millions)	Net exports (millions)
Bohemia	9,800	230	950	-120
Silesia	450	78	100	13
Bavaria	2,125	319	597	134
Saxony	2,750	75	1,320	-45
Ottoman Empire	6,225	567	1,435	1
Country	Population(millions)	Home production(millions)	Underground economy(millions)	Environmental externalities(millions)
Bohemia	1.2	1,250	5,770	-1,560
Silesia	0.16	75	128	-45
Bavaria	0.425	386	1,450	-523
Saxony	0.76	146	250	-820
Ottoman Empire	0.8	432	654	-396.3
Country	GDP(millions)	GDP per capita	Home production as a % of GDP	Underground economy as a % of GDP	Environmental externalities as a % of GDP	GDP plus(millions)	GDP plus per capita
Bohemia	10860	9050	11.5	53.1	-14.4	16,320	13600.0
Silesia	641	4006.25	11.7	20.0	-7.0	799	4993.8
Bavaria	3175	7470.588	12.2	45.7	-16.5	4,488	10560.0
Saxony	4100	5394.737	3.6	6.1	-20.0	3,676	4836.8
Ottoman Empire	8228	10285	5.3	7.9	-4.8	8,918	11147.1

To complete the above table, we used the below formulas:

1. GDP = C + I + G + Net exports
2. GDP per capita = GDP/Human population
3. Home production as a % of GDP = Home production*100/GDP
4. Underground economy as a % of GDP = Underground economy*100/GDP
5. Environmental externalities as a % of GDP = Environmental externalities*100/GDP
6. GDP plus(millions) = GDP + Home production + Underground economy + Environmental externalities
7. GDP plus per capita = GDP/ Population

We may now rank the countries by total and per capita GDP, and again by total and per capita “GDP plus" -

Country	Rank - GDP	Rank - GDP Plus
Bohemia	1	1
Silesia	5	5
Bavaria	4	3
Saxony	3	4
Ottoman Empire	2	2

When ranks of GDP and GDP plus are compared, we observe that they don't change by a lot. 3 out 5 countries retain their ranks. The biggest and smallest are still the same.

We may now rank them based on GDP per capita and GDP plus per capita -

Country	Rank - GDP per capita	Rank - GDP Plus per capita
Bohemia	2	1
Silesia	5	4
Bavaria	3	3
Saxony	4	5
Ottoman Empire	1	2

Rank of all (except Bavaria) changed when we used GDP plus per capita as a criteria for ranking these economies. The biggest and smallest here change a lot.

Below are the excel function used here -