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DUE DATE: 07TH MAY, 2013



The Case:

Gambia is a country located in West Africa. It is surrounded by Senegal, apart from a short strip

of Atlantic coastline at its western end. It is the smallest country on mainland Africa. Major

exportable products are fish, cotton, peanuts and peanuts products and its exports partners are

Hong Kong, Spain and France while importable items are fuel, machinery and manufacturing.

Agriculture accounts for 25% of Gross Domestic Product and employs 70% of the total labor

force. Hypothetical data on growth rate, inflation, population and labor force of Gambian

economy for year 2007 and 2008 is given below:

Years Growth rate Inflation rate Population Labor force Unemployed

2007 4.7% 7% 900000 700000 79000

2008 5.1% 7.2% 1000000 800000 49000

Suppose after analyzing data for the year 2007, economists of Gambia suggested to work on

exportable industries in order to have better growth rates in upcoming years. This strategy

changed the overall economic situation and components of Gross Domestic Product (GDP) for

year 2008. Comparative statistics of the economy of Gambia for both years is given below:

Years Consumption









expenditure (Millions








2007 1700 100 700 250 450

2008 1900 150 900 450 750

Due to this strategy, not only exports of Gambian economy increased but unemployment rate

also decreased. This decrease in unemployment rate compelled the other sectors to restore and

the concomitant repercussions were more industry, production, investment, consumption

particularly and improved living standard generally.


With the help of above data, calculate Gambian economy’s:

a. Gross Domestic Product (GDP) for year 2007.

b. Net exports (NX) for the year 2008.

c. Unemployment rate for the year 2007 and 2008.

d. GDP deflator for the year 2008 if real GDP and Nominal GDP for this year are RS.2500

million and Rs.2650 million respectively.

Note: Write down formula and all relevant steps involved in calculations

Marks: (5+4+6+5)

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Replies to This Discussion

a and b part k ans negtv values hain kya ? koi clear ker dy mujhe

only part b ans is negative not part a

yes this is the formula for unemployment rate


Please tally the answers

same answers....

correct ans

baki students bhi please apne answers tally kareen is se confirmation ho jay gi.

hi what is the formula for unemplomnt

Bundles of Thanks Mr.Burhan.

Yes.. Alhamdulillah! answers matched


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