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In 2009, Ozzie purchased a 1999 Opel Corsa Lite from his neighbour for his son, he purchased
a 1999 Camry from Larchmont Toyota for his wife, and he bought a 2009 new Ford for himself,
he also sold his 1993 Dodge Caravan. Which, if any, of these transactions will be included in
GDP in 2009?
2.
[1]
[2]
[3]
[4]
Study the following table and answer the question that follows.
2006
2009
Product
Price
Quantity
Price
Quantity
Camera
10
100
12
120
Legal Services
15
50
20
45
Books
40
200
45
210
Suppose that a very simple economy produces three goods: cameras, legal services, and books. The
quantities produced and their corresponding prices for 2006 and 2009 are shown in the table above.
What is real GDP in 2006, using 2009 as the base year?
3.
4.
[1]
R28 885
[2]
R11 790
[3]
R10 275
[4]
R11 200
[2]
[3]
[4]
a new car sold to Avis for use in their fleet of rental cars
[2]
faster than
[3]
slower than
[4]
Page 1
ECS 1601
Study Unit 5 Quiz
Indicate whether the following statements are true/false and explain why.
5.1
Subsidies on products will in a difference between the price paid for a good and the cost
of production and income earned by the factors of production
5.2
Double counting can be avoided by only counting the value of those sales where a good
or service reaches its final destination
5.3
The production, income and expenditure methods for measuring GDP will have
different results as they calculate GDP differently
5.4
The difference between real and nominal GDP is that certain factors of production are
excluded in the calculation of nominal GDP
Long Questions
6.
Calculate the GDP for a hypothetical economy that produces two goods (computers and
gasoline). The prices and quantities produced in each year are provided in the following table:
2006
2007
2008
Prices
Computers
Petrol
Computers
Petrol
R2 000
R50 per liter
R1 900
R100 per liter
Quantities
10
16
100 liters
120 liters
R1 200
R400 per liter
40
110 liters
6.1
6.2
Compute the real GDP for each of the three years, taking 2006 as the base year.
6.3
How does the real GDP in 2006 compare to the nominal GDP in 2006 when 2006 is used
as the base year?
6.4
Based on your calculations, comment on the economic well-being of the above twogood economy. Have things improved over time for this country (in terms of real-GDP)?
7.
List the five macroeconomic objectives and describe what these objectives aim to achieve.
8.
9.
8.1
8.2
Quantile Ratio
8.3
Draw a Lorenz curve and explain how the Gini Coefficient can be obtained making use of the
curve
Page 2
ECS 1601
Study Unit 5 Quiz
10.
Study the table below and answer the questions that follow:
2006 in
millions
17 432
39 456
20 489
18 563
79 489
14 569
2007 in
millions
18 382
37 325
19 598
18 456
80 258
17 598
Page 3