Assignment# 1,2 Last Date of Submission: 12/01/2013.

1.

Calculate following blanks: (Base year-2006) Price Quantity Nominal GDP Real GDP GDP Deflator Inflation Rate Growth rate of real GDP

Year

2005 2006 2007 2008 2009

123 234 345 367 400

1111 985 180 140 100

2. Calculate following blanks: (Base year-2010) Year Price Quantity Nominal GDP Real GDP 2010 2011 2012 2013 25 34 66 12 124 112 85 140

GDP Deflator

Growth rate of real GDP

3. 4. 5. 6.

How can we calculate GDP in expenditure method? When GDP=GNP? How can we calculate GDP in Income approach method? How can we calculate GDP in Value added method?

7. Given that Consumption function C= 1000+ .80Y and Saving function S= -- 1000+ .20Y, answer following questions by given functions: (a). Derive MPC from consumption function and Draw it graphically. (b). Derive MPS from saving function and draw it graphically. (c). Prove that MPC+MPS=1 (d). Draw graph of Consumption function and saving function, Interpret it. (e). If a persons income (Y) is 10,000 taka then Calculate MPC, MPS, APC and APS

8. (a) Differentiate between GDP and GNP.

(b) Calculate following blanks: (Base year-2006) Year Price Quantity Nominal GDP 123 234 345 367 400 1111 985 180 140 100 Real GDP GDP Deflator Inflation Rate Growth rate of real GDP

2005 2006 2007 2008 2009

9. Given that Consumption function C= a+ cY and Saving function S= -- a+ sY, answer following questions by given functions: (a). Derive MPC from consumption function and Draw it graphically. (b). Derive MPS from saving function and draw it graphically. (c). Draw graph of Consumption function and saving function, Interpret it. (d). If autonomous consumption and saving increase then how can you explain it? Show it graphically. (e) Calculate APC, and APS.

10. a) What are the distinction features of GDP and GNP? b) Give a short description on different approaches of national income accounting. c) Find out the GDP deflator and real economic growth rate from the following data set [Base Year: 2011] Year Price of food ($) 10 12 Quantity of food (kg) 500 600 Price of cloth ($) 7 8 Quantity of cloth (unit) 600 1000 Price of service ($) 100 200 Quantity of service (unit) 300 600

2011 2012

11. a) Clarify the concepts of consumption function and saving function with diagrammatic approach. b) Let, where stands for consumption and stands for disposable income. If your income is $10,000 before cutting tax and tax (t) is 10% of your income then: i. Find out the saving function. ii. Prove that MPC+MPS=1 iii. Show that APC+APS=1