Calculate the percentage (the proportion) of each category in nominal GDP and in real GDP

Data exercise #1 Assignment

Consists of four parts

Part 1: Expenditures Approach to Calculating GDP (weight 25% of the assignment grade)

Complete the following exercise

Visit the Bureau of Economic Analysis Web site at   HYPERLINK “http://www.bea.gov/” www.bea.gov  In “U.S. Economic Accounts” under “National” click on “Gross Domestic Product (GDP)”, then “Interactive Tables”: “GDP” and the” National Income and Product Account (NIPA)” Historical Tables, click “Begin using the data”, and use Section 1 – Tables 1.1.5 (Gross domestic product (nominal)) and 1.1.6 (Real Gross Domestic Product).

a) Create the table that contains the following information for the last quarter. You need this information from both tables. Omit the intermediate lines found in Tables 1.1.5 and 1.1.6 on the web 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 in nominal 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/ Real GDP]*100%

Present the information that you received in 1 (a) and 1 (b) as a table(s) in your project.

Write a report (2 pages double – spaced), which contains an analysis of the results you received.

In this report consider, but do not be limited to the following:

Why was the nominal GDP greater than the real GDP? By how much?

GDP is composed of a number of categories. What category makes up the largest portion of GDP? What category makes up the smallest portion of GDP?

What is “Gross private domestic investment”? What does gross private domestic investment measure?

What is “Net exports of goods and services”? Why it is negative?

In the table 1.1.5 find the category “National defense”. How much was the National defense for the last quarter? Calculate percentage of National defense out of “Government consumption expenditures and gross investment”. Calculate percentage of National defense out of GDP.

Please analyze and discuss the significance of the data that you received for this Data exercise. Reflect on what you have learned from this exercise.

Part 2: Income Approach to Calculating GDP (weight 25% of the assignment grade)

Complete the following exercise:

Find the information on GDP in billions of current dollars for the past four quarters. In U.S. Economic Accounts under National click on Gross Domestic Product (GDP), then click on Interactive Tables: GDP and the National Income and Product Account (NIPA) Historical Tables – click “Begin using the data”- choose Section 1: Domestic Product and Income and find table 1.7.5

Create the table that contains the following information for the last year quarterly. Omit the intermediate lines found in Table 1.7.5 on the web site.

Gross domestic product

Gross national product

Net national product

National income

Personal income

2. Write a report in your own words (1 page, double-spaced), which contains the analysis of the results you received. In this report consider, but do not be limited to the following:

What is the difference between gross domestic product (GDP) and gross national product (GNP)? What is the difference in what GDP measures compared to GNP?

Based on the table, what calculations must you make to determine GNP from GDP?

What is national income (NI)? What does NI measure?

Which was higher in this year, GNP or NI? By how much?

What calculations must you make to determine NI from GNP?

NI is composed of a number of categories. What category makes up the largest portion of NI?

Please analyze and discuss the significance of the data that you received for this Data exercise. Reflect on what you have learned from this exercise.

Part 3: GDP in Different Countries (weight 25% of the assignment grade)

Complete the following exercise:

Go to World Development Indicators database:

Select 8 countries for your project by checking the check boxes under Country.

Select the 2 data series GDP (current US\$) and Population (Total) under Series.

Select the most recent available year under Time.

You can now retrieve that data by clicking one of the options on the upper right of the window.  Clicking “Table” will allow you to view and copy the data for each country.  Clicking “Download” will allow you to download the data in Excel, which can then be copied into your report table.

Or you can simply type the required data into the table below.

Fill in the table below. Present the table in your project. Calculate the per capita GDP for the most recent available year for the countries with the equation given in the far right column.

Country

GDP

Population

Per Capita GDP

1

2

3

4 = 2/3

Write a short report in your own words (1 page, double-spaced), which contains the analysis of the results you have gotten. In this report consider, but do not be limited to the following:

List the countries by highest per capita GDP to lowest.

Does the order remain the same for total GDP as for per capita GDP.

If not, explain why is it different?

Please analyze and discuss the significance of this data and reflect on what you have learned from this exercise.

Part 4: Index of Economic Freedom (weight 25% of the assignment grade)

Log onto the Heritage Foundation’s website at  HYPERLINK “https://www.heritage.org/index/” https://www.heritage.org/index/

The world economy is “moderately free,” with another rise in economic liberty leading to a fifth annual global increase, according to the editors of theHYPERLINK “http://www.heritage.org/index/” 2017 Index of Economic Freedom, released today by The Heritage Foundation. There are 12 specific categories: property rights, judicial effectiveness, government integrity, tax burden, government spending, fiscal health, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. Scores in these categories are averaged to create an overall score. Based on an average score, each of 180 countries graded in the 2017 Index is classified as “free” (i.e., combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).

Click on COUNTRY RANKING to find the rank of economic freedom. IMPORTANT – Make sure you use the Rank and not the Overall Score.

Click on EXPLORE THE DATA to find the rank of business, trade, financial freedom, and property rights.

Find the rank in economic freedom (overall) of the countries that you were using in part III of the assignment.

Find the rank in business, trade, financial freedom, and property rights of the countries that you were using in part III of the assignment.

Compare the rank in economic freedom (overall) and other indicators with the order of the countries using the per capita GDP in the table in part III of the assignment.

Present the information that you received in your project as a table.

Write a report in your own words (1 page, double-spaced), which contains the analysis of the results that you received. Discuss the significance of the data and what you feel is the relevance of rankings. Please reflect on what you have learned from this assignment.