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Save on Textbooks! Other   Other Homework Help ( 1213 ) Math   Math- Algebra 1 ( 2437 )   Math- Algebra 2 ( 1189 )   Math- Calculus ( 381 )   Math- Geometry ( 594 )   Math- Other ( 1522 )   Math- Precalculus ( 408 )   Math- Trigonometry ( 285 ) Biology   Biology- Animal ( 155 )   Biology- Cell ( 530 )   Biology- Ecological ( 109 )   Biology- General ( 651 )   Biology- Microbiology ( 100 ) Business   Business- Accounting ( 674 )   Business- Finance ( 511 )   Business- Other ( 454 ) Chemistry   Chemistry- Biochem ( 162 )   Chemistry- Organic ( 166 )   Chemistry- Other ( 1330 ) Economics   Economics- Macroeconomics ( 829 )   Economics- Microeconomics ( 610 ) Essay Service   Essay Correction ( 96 )   Essay Writing ( 396 ) History   History- World ( 831 )   US History- Post 1877 ( 472 )   US History- Pre 1877 ( 347 ) Language   English ( 829 )   Foreign Languages ( 118 )   World Literature ( 196 ) Physics   Physics- Electricity, Magnetism ( 248 )   Physics- General ( 1736 )   Physics- Mechanical, Heat, Sound ( 343 )   Physics- Wave, Quantum Physics ( 114 ) z Medical Questions Your Question Section 4: Macroeconomic Models and Fiscal Policy - Chapter 10 Web Q's QUESTION 1 The multiplier - calculating hypothetical changes in GDP Go to the Bureau of Economic Analysis at http://www.bea.gov, and use the BEA interactivity feature to select National Income and Product Account Tables. Then find Table 1.1.5, which contains the most recent quarterly values for GDP = Ca+Ig+G+(X-M). What is the most recent quarter for which data is available? Assume that the MPC is .75 and that, for each of the following, the values of the initial variables are those you just discovered. Determine the new value of GDP if, other things equal, (a) investment increased by 5 percent, (b) imports increased by 5 percent while exports increased by 5 percent, (c) consumption increased by 5 percent, and (d) government spending increased by 5 percent. Create a table showing both the origional values and the new values you have calculated. Which of the changes, (a) through (d), cause the greatest change in GDP in absolute dollars? QUESTION 2 GDP gap and recessionary gap The St. Louis Federal Reserve Bank at http://www.research.stlouisfed.org provides data on both real GDP (chained 1996 dollars) and real GDP for the United States. Click on the "Economic Data-FRED" link at the top of the page, then select "Gross Domestic Product and Components." Now select GDP/GNP. What was potential GDP for the third quarter of 2001? What was the actual level of real GDP for that quarter? What was the size difference between the two - the negative GDP gap? If the multiplier was 2 in that period, what was the size of the economy's recessionary gap? Use the tables labled GDPC1 with a frequency of Q (quarterly) for the actual real GDP and GDPPOT with a frequency of Q (quarterly) for the potential GDP. Click directly on GDPC1 and GDPPOT. DO NOT click on the check box and add the table to your list. Do not estimate values from the graphs. Click on "View Data" for the actual values. Please Login to Answer the Question LOGIN

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