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Due Date: 12th April, 2012 Marks: 15

Assignment:
Chad is under developed country located in Central Africa. Landlocked Chad’s
economic development suffers from its geographic remoteness, lack of infrastructure, lack of basic necessities and political turmoil. About 85 % of the population depends on the agriculture including the herding of livestock. Because of weak agricultural economy, majority of the people belong to middle class and live in cottages. Suppose, during year 2007, among total population, 5 billion people were unemployed and 175 billion people were employed. During the same year, people consumed durable goods worth Rs.300, non-durable goods worth Rs.500 and services worth Rs.300.

In this year, government planned to develop the economy and used Rs.900 for government expenditures. This amount was used for education expenditures, health expenditures, for discovering new oil resources and for industrial sector seriously. These decisions not only improved the sectors mentioned above but also stimulated the business investment. Businessmen invested Rs.300 for the development of their business and used new technology and ways. Government expenditures and businessmen investment affected the international trade positively. In this year, Chad exported crude oil, processed meat and cotton for Rs.350 and imported commodities for domestic use of worth Rs.150. Next year, China and USA invested in the oil sector and built refineries.

This project solved the problem of unemployment for the year 2008, by virtue of this, unemployed and employed values were 3 billion and 187 billion respectively.

Requirements:
Use the above data to calculate Chad’s:
a. Gross domestic product (GDP) for year 2007.
b. Net exports (NX) for year 2007.
c. Labor force for year 2007 and 2008.
d. Unemployment rate for year 2007 and 2008.
e. GDP deflator for year 2007 if real GDP during this year is Rs.2100. Marks: (4+2+3+3+3)

SOLUTION:

ANSWER:
“Chad is under developed country located in Central Africa”.

DATA:
For the year 2007:

Unemployed Population………. 5 billion
Employed Population …………..175 billion
Consumed durable goods………..Rs.300
Consumed Non-durable goods…. Rs.500
Services………………………………… Rs.300
Government Expenditures ………Rs.900
Business Investment ………………Rs.300
Exports………………………………. Rs.350
Imports ………………………………Rs.150

For year 2008:

Unemployed Population……….. 3 billion
Employed Population……………. 187 billion

A) GROSS DOMESTIC PRODUCT (GDP) FOR YEAR 2007:

Solution:

Consumed durable goods……………. Rs.300
Consumed Non-durable goods……… Rs.500
Services……………………………………. Rs.300
Government Expenditures………….. Rs.900
Business Investment……………………Rs.300
Exports (EX) ………………………………Rs.350
Imports (IM)…………………………….. Rs.150

FORMULA FOR GDB:
Y = C + I + G + NX

Where
Y = GDP = Value of Total Output
C + I + G + NX = Aggregate Expenditure

C=Rs.300+Rs.500+Rs.300
=Rs.1100

NX=Total Exports -Total Imports
=Rs.350-Rs.150
=Rs.200

Now

By applying
Y = C + I + G + NX
=Rs.1100+Rs.300+Rs.900+Rs.200
=Rs.2500

B). NET EXPORTS (NX) FOR YEAR 2007:

FORMULA:

NX= Total Exports -Total Imports
By applying
NX=EX-IN
=Rs.350-Rs.150
=Rs.200

C).LABOR FORCE FOR YEAR 2007 AND 2008:

LABOR FORCE ……………..2007 ……..2008
Unemployed Population …….5 billion ….3 billion
Employed Population ………175 billion …187 billion
Total …………………..180 billion …190 billion

D). UNEMPLOYMENT RATE FOR YEAR 2007 AND 2008:

FORMULA:

Unemployment Rate = Number of Unemployed x 100
……………………………………….Labor Force

BY APPLYING

UNEMPLOYMENT RATE FOR YEAR 2007:

Unemployment Rate = Number of Unemployed x 100
……………………………………….Labor Force
=5/180*100
=2.778%

UNEMPLOYMENT RATE FOR YEAR 2008:

Unemployment Rate = Number of Unemployed x 100
……………………………………….Labor Force
=3/190*100
=1.579%

E).GDP DEFLATOR FOR YEAR 2007:

IF
REAL GDP DURING THIS YEAR IS RS.2100;
NOMINAL GDB FOR YEAR 2007 IS RS.2500

FORMULA:
GDP Deflator = Nominal GDP × 100
……………………..Real GDP

By Appling
GDP Deflator = Nominal GDP × 100
……………………..Real GDP

=2500/2100*100
=Rs.119.04




Tags: 1, 2012, ECO403, Macroeconomics-assignment, idea, no, spring

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ANSWER:
“Chad is under developed country located in Central Africa”.
DATA:
For the year 2007:
Unemployed Population 5 billion
Employed Population 175 billion
Consumed durable goods Rs.300
Consumed Non-durable goods Rs.500
Services Rs.300
Government Expenditures Rs.900
Business Investment Rs.300
Exports Rs.350
Imports Rs.150
For year 2008:
Unemployed Population 3 billion
Employed Population 187 billion
A) GROSS DOMESTIC PRODUCT (GDP) FOR YEAR 2007:
Solution:
Consumed durable goods Rs.300
Consumed Non-durable goods Rs.500
Services Rs.300
Government Expenditures Rs.900
Business Investment Rs.300
Exports (EX) Rs.350
Imports (IM) Rs.150
FORMULA FOR GDB:
Y = C + I + G + NX
Where
Y = GDP = Value of Total Output
C + I + G + NX = Aggregate Expenditure

C=Rs.300+Rs.500+Rs.300
=Rs.1100
NX=Total Exports -Total Imports
=Rs.350-Rs.150
=Rs.200
Now
By applying
Y = C + I + G + NX
=Rs.1100+Rs.300+Rs.900+Rs.200
=Rs.2500
B). NET EXPORTS (NX) FOR YEAR 2007:
FORMULA:
NX= Total Exports -Total Imports
By applying
NX=EX-IN
=Rs.350-Rs.150
=Rs.200
C).LABOR FORCE FOR YEAR 2007 AND 2008:
LABOR FORCE 2007 2008
Unemployed Population 5 billion 3 billion
Employed Population 175 billion 187 billion
Total 180 billion 190 billion
D). UNEMPLOYMENT RATE FOR YEAR 2007 AND 2008:
FORMULA:
Unemployment Rate = Number of Unemployed x 100
Labor Force
BY APPALYING
UNEMPLOYMENT RATE FOR YEAR 2007:
Unemployment Rate = Number of Unemployed x 100
Labor Force
=5/180*100
=2.778%

UNEMPLOYMENT RATE FOR YEAR 2008:
Unemployment Rate = Number of Unemployed x 100
Labor Force
=3/190*100
=1.579%
E).GDP DEFLATOR FOR YEAR 2007:
IF
REAL GDP DURING THIS YEAR IS RS.2100;
NOMINAL GDB FOR YEAR 2007 IS RS.2500
FORMULA:
GDP Deflator = Nominal GDP × 100
Real GDP
By Appling
GDP Deflator = Nominal GDP × 100
Real GDP
=2500/2100*100
=Rs.119.04

HERE are just formulas to solve the Assignment you have to calculate it yourself

GDP = Y = C + I + G + NX
NX = EX – IM = Net Exports – Net Imports

Formula for Labor Force

Formula for Labor Force = employed + Unemployed peoples

Formula for Unemployement rate

Formula for Unemployement rate = Number of unemployed x 100
                                                                           Labore Force

Formula for GDP DEFLATOR

Formula for GDP DEFLATOR = Nominal GDP x 100
                                                              Real GDP

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