Economic principles
GDP, economic growth, unemployment and inflation
Question 1. What is the gross domestic product of a country? What is meant by 'intermediate goods' and are they included in the measure of GDP? Give an example of a good that could be an intermediate good or a final good depending on the situation. Explain your answers. (2 marks) – Approx. number of words: 120.
Suppose that the following table represents the goods and services produced in a very simple closed economy in 2016. Using the information in the table below, answer question 2.
Product Quantity Price
Steel 1000 $100
iPods 5000 $300
Cars 500 $25 000
Legal Services 100 $2000
Question 2. Assume that steel is used as an input in the production of cars. Using that information, calculate the GDP for the year 2016. Explain your answer in words and show all calculations. (2 marks) – Approx. number of words: 120 plus calculations.
For each of the following, indicate if the person would be classified as employed, unemployed, or not in the labour force and why:
Question 3. A 45-year-old person who has been made redundant in their current position is looking for work and is able to start immediately, but does not have the skills required by industry and needs retraining. (1 mark) – Maximum number of words: 40.
Question 4. A person who is working for 10 hours a week paid work in a supermarket while studying full time. The person is looking for full time work but cannot start until they finish their study in 3 months time. (1 mark) – Maximum number of words: 40.
Refer to the following table and answer question 5.
Persons
Employed 8000
Unemployed 500
Not in the labour force 4000
Question 5. Define and calculate the unemployment rate (show working). What is the labour force participation rate? (2 marks) – Approx. number of words: 40 plus calculations.