Econ:214 Intermediate Macroeconomics Homework 1

发布时间：2024-06-05

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Econ:214 Intermediate Macroeconomics

Homework 1

Due Date: Jan 15, 2024

For Problems 1 and 2, the data set in the Excel spreadsheet with the name “HW1.xlsx” is available on the course website. You need to submit the spreadsheet showing your results and plots. The plots should be in separate tabs. Clearly label each row or column (e.g., % growth rate, log(GDP), etc.)

Problem 1. You are given a 20-year data on real GDP in Canada.

(a) Use Excel to plot the real GDP against time over the period 2002 to 2021. (remember to label the x-y coordinates).

(b) Use Excel to plot the natural logarithm (i.e., the log-level) of the real GDP the same period. (remember to label the x-y coordinates)

(d) Now, instead of calculating the annual percentage growth rate directly, calculate the log-approximation, i.e., 100 × (ln(GDPt ) − ln(GDPt−1)). Compare your approxima- tion to the results in part (c). From part (b), can you tell the average of growth rate across the last 20 years?

Problem 2. You are given a detrended real GDP, detrended government spending, and detrended business investment in a quarterly frequency. The data spans from 1961 Quarter 1 to 2022 Quarter 3.

(a) Use Excel to plot the time series of government spending along with the real GDP, then plot the time series of business investment with the real GDP. Label your graphs correctly.

(b) Use command STDEV in Excel to calculate the standard deviation of each time series. Then use command CORREL to calculate the correlation between the GDP and other series respectively.

(d) Scatter plot the GDP and the government spending as well as the GDP and the business investment. Are these series procyclical, countercyclical or acyclical?

(e) What lead/lag patterns do you detect in the plots?

Problem 3. Assume an economy with a coal producer, a steel producer, and some consumers (there is no government). In a given year, the coal producer produces 15 million tons of coal and sells it for $5 per ton. The coal producer pays $50 million in wages to consumers. The steel producer uses 25 million tons of coal as an input into steel production; all purchased at $5 per ton. Of this, 15 million tons of coal comes from the domestic coal producer and 10 million tons is imported. The steel producer produces 10 million tons of steel and sells it for $20 per ton. Domestic consumers buy 8 million tons of steel, and 2 million tons are exported. The steel producer pays consumers $40 million in wages. All profits made by domestic producers are distributed to domestic consumers

(a) Calculate GDP using (i) the product approach, (ii) the expenditure approach, and (iii) the income approach.

(b) Determine the current account surplus.

(c) What is GNP in this economy? Determine GNP and GDP in the case where the coal producer is owned by foreigners, so that the profits of the domestic coal producer go to foreigners and are not distributed to domestic consumers.

Problem 4. In year 1 and year 2, two products are produced in a given economy, computers and bread. Suppose that there are no intermediate goods. In year 1, 30 computers are produced and sold at $1,000 each, and in year 2, 45 computers are sold at $1,200 each. In year 1, $10,000 loaves of bread are sold for $1.00 each, and in year 2, 12,000 loaves of bread are sold for $1.40 each.

(a) Calculate nominal GDP in each year.

(b) Calculate real GDP in each year, and the percentage increase in real GDP from year 1 to year 2 using year 1 as the base year. Next, do the same calculations using the chain-weighting method.

1 to year 2 using year 1 as the base year. Next, do the same calculations using the chain-weighting method.

(d) Using year 1 as the base year, calculate the CPI in years 1 and 2, and calculate the CPI rate of inflation.

Problem 5. Consider an economy with a corn producer, some consumers, and a government. In a given year, the corn producer grows 30 million bushels of corn and the market price for corn is $5 per bushel. Of the 30 million bushels produced, 20 million bushels are sold to consumers, 5 million are stored in inventory, and 5 million are sold to the government. The corn producer pays $60 million in wages to consumers and $20 million in taxes to the government. Consumers pay $10 million in taxes to the government, receive $10 million in interest on the government debt, and receive $5 million in Social Security payments from the government. The profits of the corn producer are distributed to consumers.

(a) Calculate GDP using (i) the product approach, (ii) the expenditure approach, and (iii) the income approach.

(b) Calculate private disposable income, private sector saving, government saving, national saving, and the government deficit. Is the government budget in deficit or surplus?