ECO403 - Macroeconomics Assignment No. 01 Solution and Discussion Fall 2013 Due Date 30-11-2013

[+M.Tariq Malik]

The Case:
Suppose an Asian team of economists visit North Africa to analyze the economic
behavior of the people of North Africa during 1990s. After identifying the targets,
economists select Sudan one of the countries of North Africa. In 1991 and 1992,
the labor force was 700000 and 900000 respectively. Furthermore, they are unable
to get complete data. The data was in the shape of graph and incomplete tables
as follows:

Y-axis= Nominal GDP

In addition incomplete data is creating the crippled situation for the team. So,
economists compile a few questions. Being a student of economics, how can you
solve these given questions?
Requirements:
Using the above data, calculate:
a. National saving for the year 1991 and 1992
b. Nominal interest rate for the year 1990
c. GDP deflator for the year 1990
d. Unemployment rate for the year 1991
Note: Write down formula and all relevant steps involved in calculations. The
values of Nominal GDP and inflation rate should be taken from the relevant
graphs.
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[MUHAMMAD MAJEED BAIG]

700+500=1200 and you write 1300 why?

[1kptsojjzje33]

ap logo ko bta jo ri hun k toal savings pe interest lgta ha

[1kptsojjzje33]

students me puri file almost 4 bje tk upload kr dungi ok dot worry or smjha b dungi tc

[MUHAMMAD MAJEED BAIG]

its ok! carry on half wit!

[+ Saim Rao]

Lect. 12 ke start me

EXERCISE
Suppose V is constant, M is growing 5% per year, Y is growing 2% per year, and r = 4.
Solve for i (the nominal interest rate).

ANSWERS
First, find  = 5 - 2 = 3.
Then, find i = r +  = 4 + 3 = 7.

iss exercise me to 4% real interest rate ko as it he add kiya inflation rate me????

[+ Saim Rao]

b.         Nominal interest rate for the year 1990

          (Nominal interest rate) i = r + p

First, find inflation rate. 

GDP Deflator = Nominal GDP × 100

                      Real GDP

                  = 6000 / 3500 x 100

                  =  171.42

inflation rate =  171.42 – 100 = 71.42

 

(Nominal interest rate) i =  4 + 71.42

(Nominal interest rate) i =  75.42

[innocent dolly]

BT how nominal gdp is 6000???

if we see the graph then there is a small line on 1990 wich shows that nominal gdp is 5800 not 6000.....

[shoaib hussain]

See in the graph yeAR 1990. It's 6000 not 5800 

[+ Saim Rao]

Reference at pg-12

The rate of change of GDP deflator is the inflation rate. GDP Deflator and inflation rate for the
above example can be calculated as:

         Nominal GDP     Real GDP         GDP Deflator         Inflation Rate
2001    Rs 46,200        Rs 46,200          100.0                  ------
2002        51,400            50,000          102.8                   2.8%
2003        58,300            52,000          112.1                   9.1%

[Muhammed Imran]

Any one can explain as formula given below??

National saving, 

S= private saving + public saving

= (Y –T) – C + T – G

= Y – C – G

 

Public Saving for 1990???

Private Saving for 1991???   

[innocent dolly]

its ix given in da table :) private saving n public saving

[fatima syed]

inocent dolly 6,ooo graph say hey