Grantham University Gross Domestic Product and Full Employment Worksheet

Question Description

Part 1

Construct the AD, SRAS, and LRAS curves for an economy experiencing (a) full employment, (b) an economic boom, and (c) a recession. What will happen in each case if it’s only temporary? What will happen in each case if it’s permanent?

Part 2

Gross Domestic Product

Use the data chart to answer the questions below.

Consumption	$500
Government Expenditures	$200
GNP	$800
Gross Private Domestic Investment	$100
Imports	$100
Exports	$50

Questions:

1.Using the data above, GDP is equal to __________________.

2.Using the data above, Net Exports is equal to _____________.

3.Using the data above, PCE (Personal Consumption Expenditure) is equal to _____________.

4.If the dollar amounts of the items above are the nominal amounts in year 2017, and the quantities of units are identical in years 2010 and 2017, but prices in 2010 were 20% less than 2017, Real GDP in 2017 using 2010 as the base year is equal to _______________.

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