Part 1: Expenditures Approach to Calculating GDP (weight 45% of the assignment grade) BEA estimates the nation's GDP for
Posted: Sun Jul 03, 2022 1:00 pm
Part 1: Expenditures Approach to Calculating GDP (weight 45% ofthe assignment grade) BEA estimates the nation's GDP for each yearand each quarter. But new GDP statistics are released every month.Why? Because for each quarter, BEA estimates GDP three times. Theadvance estimate, coming about a month after the quarter's end, isan early look based on the best information available at that time.The second estimate and third estimate each incorporate additionalsource data that weren't available the month before, improvingaccuracy.( www.bea.gov). BEA publishes estimates of levels atannual rates (for most series) for ease of comparisons with relatedand historical data. For example, in its February 2, 2004 personalincome and outlays release, BEA estimated that personal income forDecember 2003 was $9,335.8 billion at an annual rate. This iseasily compared to BEA's estimates of personal income for thefourth quarter of 2003 ($9,312.6 billion, at an annual rate) andfor the entire year of 2003 ($9,187.4 billion).(www.bea.gov).Published January 13, 2006 Complete the following exercise Visitthe Bureau of Economic Analysis website at www.bea.gov. From thedrop-down menu under "Data", click on "by Economics Account". Thenclick on "National"> "Gross Domestic Product > and "FullRelease and Tables". (To find "Full Release and Tables" you need toscroll down the page to the section "Current Release". Use table 3(Gross Domestic Product: Level and Change from Preceding Period).Tables are located at the end of the Release, so you need to scrollall the way down to the tables. The left columns are nominal GDP(and its components) and the right half represents real GDP(chained 2012 dollars).
a) Create the table that contains the following information forthe last available quarter. Please note that using the data forprevious years and/or previous estimates will produce grade zerofor this part of the project. You need this information from bothparts of the table 3- (nominal GDP (and its components) from leftcolumns and real GDP (chained 2012 dollars) from the right part ofthe table 3). Omit the intermediate lines found in Table 3 on theweb site.
• Gross domestic product
• Personal consumption expenditures
• Gross private domestic investment
• Net exports of goods and services
• Government consumption expenditures and gross investment
b) Calculate the percentage (the proportion) of each category innominal GDP and in real GDP.
Using Nominal GDP:
[Personal consumption expenditures / Nominal GDP]*100%
[Gross private domestic investment / Nominal GDP]*100%
[Net exports of goods and services / Nominal GDP]*100%
[Government consumption expenditures and gross investment/Nominal GDP]*100%
And using Real GDP:
[Personal consumption expenditures / Real GDP]*100%
[Gross private domestic investment / Real]*100%
[Net exports of goods and services / Real GDP]*100%
[Government consumption expenditures and gross investment/ RealGDP]*100%
Present the information that you received (a) and (b) as atable(s) in your project.
2. Write a report (2 pages double - spaced), which contains ananalysis of the results you received. In this report consider, butdo not be limited to the following:
1. Why was the nominal GDP greater than the real GDP? By howmuch?
2. GDP is composed of a number of categories. What categorymakes up the largest portion of GDP? What category makes up thesmallest portion of GDP?
3. What is "Gross private domestic investment"? What does grossprivate domestic investment measure?
4. What is "Net exports of goods and services"? Why it isnegative?
5. In the left part of the table 3 (nominal GDP) find thecategory "National defense". How much was the National defense forthe last quarter? Calculate percentage of National defense out of"Government consumption expenditures and gross investment".Calculate percentage of National defense out of GDP.
6. Please analyze and discuss the significance of the data thatyou received for this Data exercise.
7. Reflect on what you have learned from this exercise.
Part 2: Income Approach to Calculating GDP (weight 45% of theassignment grade) Complete the following exercise: Go tohttp://www.bea.gov/ Visit the Bureau of Economic Analysis websiteat www.bea.gov. From the drop-down menu under "Data", click on "byEconomics Account". Then click on "National", "Gross DomesticProduct, and "Full Release and Tables". Use table 7 (Relation ofGross Domestic Product, Gross National Product, and NationalIncome) and table 8 (Personal Income and its Disposition).
1. Create the table that contains the following information forthe last quarter where data required for this exercise isavailable. Please note that using the data for previous yearsand/or previous estimates will produce a grade of zero for thispart of the project. Omit the intermediate lines found in Tables 7and 8 on the web site. • Gross domestic product • Gross nationalproduct • Net national product (you should calculate it as Grossnational product minus Consumption of fixed capital) • Nationalincome • Personal income • Personal Disposable Income • PersonalSavings Present the information that you received in yourproject.
2. Make a report in your own words, which contains the analysisof the results you received. In this report consider, but do not belimited to the following:
1. What is the difference between gross domestic product (GDP)and gross national product (GNP)? What is the difference in whatGDP measures compared to GNP?
2. Based on the table, what calculations must you make todetermine GNP from GDP?
3. What is national income (NI)? What does NI measure?
4. Which was higher in this year, GNP or NI? By how much?
5. What calculations must you make to determine NI from GNP?
6. NI is composed of a number of categories. What category makesup the largest portion of NI?
7. What calculations must you make to determine Personal Incomefrom National Income?
8. What calculations must you make to determine PersonalDisposable Income and Personal Savings?
9. Please analyze and discuss the significance of the data thatyou received for this Data exercise. 10. Reflect on what you havelearned from this exercise.
a) Create the table that contains the following information forthe last available quarter. Please note that using the data forprevious years and/or previous estimates will produce grade zerofor this part of the project. You need this information from bothparts of the table 3- (nominal GDP (and its components) from leftcolumns and real GDP (chained 2012 dollars) from the right part ofthe table 3). Omit the intermediate lines found in Table 3 on theweb site.
• Gross domestic product
• Personal consumption expenditures
• Gross private domestic investment
• Net exports of goods and services
• Government consumption expenditures and gross investment
b) Calculate the percentage (the proportion) of each category innominal GDP and in real GDP.
Using Nominal GDP:
[Personal consumption expenditures / Nominal GDP]*100%
[Gross private domestic investment / Nominal GDP]*100%
[Net exports of goods and services / Nominal GDP]*100%
[Government consumption expenditures and gross investment/Nominal GDP]*100%
And using Real GDP:
[Personal consumption expenditures / Real GDP]*100%
[Gross private domestic investment / Real]*100%
[Net exports of goods and services / Real GDP]*100%
[Government consumption expenditures and gross investment/ RealGDP]*100%
Present the information that you received (a) and (b) as atable(s) in your project.
2. Write a report (2 pages double - spaced), which contains ananalysis of the results you received. In this report consider, butdo not be limited to the following:
1. Why was the nominal GDP greater than the real GDP? By howmuch?
2. GDP is composed of a number of categories. What categorymakes up the largest portion of GDP? What category makes up thesmallest portion of GDP?
3. What is "Gross private domestic investment"? What does grossprivate domestic investment measure?
4. What is "Net exports of goods and services"? Why it isnegative?
5. In the left part of the table 3 (nominal GDP) find thecategory "National defense". How much was the National defense forthe last quarter? Calculate percentage of National defense out of"Government consumption expenditures and gross investment".Calculate percentage of National defense out of GDP.
6. Please analyze and discuss the significance of the data thatyou received for this Data exercise.
7. Reflect on what you have learned from this exercise.
Part 2: Income Approach to Calculating GDP (weight 45% of theassignment grade) Complete the following exercise: Go tohttp://www.bea.gov/ Visit the Bureau of Economic Analysis websiteat www.bea.gov. From the drop-down menu under "Data", click on "byEconomics Account". Then click on "National", "Gross DomesticProduct, and "Full Release and Tables". Use table 7 (Relation ofGross Domestic Product, Gross National Product, and NationalIncome) and table 8 (Personal Income and its Disposition).
1. Create the table that contains the following information forthe last quarter where data required for this exercise isavailable. Please note that using the data for previous yearsand/or previous estimates will produce a grade of zero for thispart of the project. Omit the intermediate lines found in Tables 7and 8 on the web site. • Gross domestic product • Gross nationalproduct • Net national product (you should calculate it as Grossnational product minus Consumption of fixed capital) • Nationalincome • Personal income • Personal Disposable Income • PersonalSavings Present the information that you received in yourproject.
2. Make a report in your own words, which contains the analysisof the results you received. In this report consider, but do not belimited to the following:
1. What is the difference between gross domestic product (GDP)and gross national product (GNP)? What is the difference in whatGDP measures compared to GNP?
2. Based on the table, what calculations must you make todetermine GNP from GDP?
3. What is national income (NI)? What does NI measure?
4. Which was higher in this year, GNP or NI? By how much?
5. What calculations must you make to determine NI from GNP?
6. NI is composed of a number of categories. What category makesup the largest portion of NI?
7. What calculations must you make to determine Personal Incomefrom National Income?
8. What calculations must you make to determine PersonalDisposable Income and Personal Savings?
9. Please analyze and discuss the significance of the data thatyou received for this Data exercise. 10. Reflect on what you havelearned from this exercise.