Assignment 1

Economic Environment
PGP 26(D & E) and PGP Finance 03
Prof Ashok Thomas

Name: Parth Bhatia

Section and Roll no: Section D PGP/26/220
Instructions

• Write your name and roll number in capital letters.

• If you can’t solve the questions please consult with your friends and understand how we
reach the answer. Remember honestly performing these activities will help you in other
evaluation components.
• Write your answers in the space provided using pen or pencil (Strictly handwritten).
Scan and attach the document on Moodle (VC). DEADLINE: SUNDAY OCTOBER
30,2022 (11 PM) Link for data:
https://pib.gov.in/PressReleasePage.aspx?PRID=1829784#:~:text=GDP%20at%20Consta
nt%20(2011%2D12,a%20growth%20of%204.1%20percent.

Question 1) Collect the Q4 2021-22 GVA decomposed figure and the expenditure side of GDP.
(Both data are released at current and constant prices)

A) Using the GVA which sector has positive growth and which sector have registered lowest
growth?
B) Compare across the three sectors and which sector growth has been seen as a pusher for
higher employment generation and discuss how this sector growth can affect the demand
side of GDP in the coming quarters.

C) Using the information from expenditure method, please discuss the trends. What is the
consumption growth, Investment growth and NX growth rate based on Q4 2021-22?
D) Calculate the GDP deflator for the Q4 2021-22 and Q4 2020-21 using the formula we learned
in class. Hint: Use the expenditure side of GDP.

E) Calculate the inflation rate between these two quarters described in the deflator question.
 F) Calculate the growth in Nominal GDP, Real GDP between Q4 2021-22 and Q1 2020- 2021.

Question 2) Using the CPI index given for Q4 2021-22 and Q4 2020-21 (Average of three months
can be used as Quarter CPI Index)

A) Calculate the inflation rates between these quarters.

B) Compare with the inflation which we received from GDP deflator and analyse which is more
accurate when we plug this inflation data.
 Question 3) The following data is for Econoland: 14,000 population 10,000 are 16 years
of age and over 400 are not working but actively looking for work 6000 are working full
time 1,000 have stopped looking for work 1,600 are retired 1,000 are working part
time and wanting to work part time 600 are working part time and want to work full time
A) What is Econoland’s labor force participation rate?
B) What is the unemployment rate?
C) Intuitively address the relationship between LFPR and unemployment rate during business cycles.