Dr. Dowlah
Spring 2013
Final Writing Assignment
PRINCIPLES OF MACROECONOMICS (Online)
Due by May 15. No late submission will be accepted as the answers will be posted the next day, on May 16th.
A Total of 50 Points possible, which is worth 5% of your Final Grade. Show your work (like formula used and so on) and draw graphs carefully, otherwise full credits will not be given even for correct answers.
You can work together, but the homework should be your own work—identical homework will be penalized for plagiarism and cheating.

Question #1 (15 points)
A.Define the concepts of Gross Domestic Product and Gross National Product—how are they different? Based on the data provided in the table below, calculate: Gross Domestic Product (GDP), Gross National Product (GNP), Net National Product (NNP), and National Income (NI) for this economy.
Consumption spending
Gross Investment
Exports
Indirect Business taxes
Capital Consumption allowance $1,150
320
420
90
60 Government purchases
Social Security Benefits
Imports
Personal Income tax $200
365
540
225
A. Gross Domestic Product-the total market value of goods and services produced within the borders of a country and within a certain time period, regardless of whom.
Gross National Product-the total value of final goods and services produced within a time period by the citizens of a country, regardless of where they reside.
The difference between GDP and GNP is GDP measures output based on output, while GNP measures output based on ownership.
GDP: Y=C+I+G+X-M
Y= 1,150+320+200+(420-540)
Y= $1550
GNP:
B. Suppose a country produces only two goods: Bags and Toys. The Tables below show its output in 2010 and 2011. Calculate Nominal and Real GDP for 2010 and 2011. What is the economic growth rate in 2011? If that is the average growth rate of this country, how long will it take to double this country’s GDP?

Table 1
2010 Quantity Price (each) Bags
Toys 100
50 $10
$12…