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# UGBA 101B

Summer 2016
John Gonzales

Assignment #1
1.

Suppose we have the following data for an economy that produces only three goods,
X, Y and Z. The data is for the actual price and quantity purchased of each product.
2013

2014

2015

900
\$12.00

1000
\$12.50

1025
\$12.50

320
\$22.00

330
\$23.00

340
\$23.50

55
\$675

60
\$700

63
\$750

Good X
output
price
Good Y
output
price
Good Z
output
price

(a) Using 2013 as the base year, calculate nominal and real GDP for 2013, 2014
and 2015.
(b) Calculate nominal economic growth and real economic growth for 2014
and 2015.
(c) Calculate the AE price index and rate of inflation for 2014 and 2015.
2.

For each situation below, show quantitatively and explain what is happening in the
capital market.

(a)
(b)
(c)
(d)
(e)

200
700
-300
100
500

300
600
300
300
300

-200
100
-400
-400
100

400
400
100
500
400

300
400
300
300
300

3.

Q1 = 60

Q2 = 12

Q3 = 2

Q4 = 8

Q5 = 26

Q6 = 18

Good 1

Good 2

Good 3

Good 4

Good 5

Good 6

2012

\$2.40

\$40.00

\$620.50

\$120.00

\$5.52

\$3.20

2013

\$2.50

\$41.20

\$630.50

\$122.60

\$5.82

\$3.10

2014

\$2.38

\$40.90

\$610.20

\$123.00

\$5.72

\$3.22

2015

\$2.48

\$41.10

\$618.50

\$122.40

\$5.84

\$3.34

## (a) Calculate the CPI for each year.

(b) Calculate the rate of inflation for 2013, 2014 and 2015.