Live Classroom lecture
WEEK 4 LIVE CLASSROOM
START WATCHING THE RECORDING AT ABOUT MIN. 4:15
LESSON CONTENT VIDEO
THIS WEEK THE POWERPOINT SLIDES ARE SHOWN ON THE SCREEN
BUT THERE IS A MISTAKE IN THE DEFINITION OF NET GDP. THE DEFINITION PROVIDED TO YOU IN THE SLIDE IS NOT CORRECT. THE SLIDE GIVES THE WRONG CONCEPT OF DEPRECIATION. IT REFERS TO CURRENCY DEPRECIATION (WHICH MEANS THE VALUE OF THE CURRECY DECREASES RELATIVE TO OTHER CURRENCIE – FOR EXAMPLE THE DOLLAR LOSES VALUE COMPARED WITH OTHER COUNTRY’S CURRENCIES). THE CURRENT CONCEPT OF DEPRECIATION IS THE DEPRECIATION OF THE CAPITAL STOCK (EXAMPLE: THE “WEAR AND TEAR” OF THE MACHINERY, EQUIPMENT, ETC. USED TO PRODUCE GOODS AND SERVICES)
HOMEWORK PROBLEMS CAN BE ANSWERED USING CHAPTERS 8 AND 9 OF YOUR TEXTBOOK (THERE DOES NOT APPEAR TO BE ANY MISTAKES IN THE PROBLEMS THIS WEEK)
WRITTEN ASSIGNMENT
ONE PAGE WRITTEN, PLUS THE TABLE
2015 DATA
INDICATE THAT YOU HAVE PROVIDED GNI RATHER THAN GDP
AT THE BOTTOM OF THE TABLE PROVIDE THE SOURCES OF THE DATA (GNI AND GNI PER CAPITA FROM SOURCE X; DURABLE/NONDURABLE GOODS FROM SOURCE Y, ETC.
GDP PER CAPITA = GDP/POPULATION
GNI PER CAPITA = GNI/POPULATION
US ECONOMY IS MUCH BIGGER THAN CHINA’S ECONOMY, SO IT MAKES NO SENSE TO COMPARE COMPONENTS OF GDP IN TERMS OF THEIR VALUES (IN DOLLARS OR YUAN/RENMINBI); SO COMPARE SUCH THINGS AS SPENDING ON DURABLE GOODS, YOU NEED TO DIVIDE BY GDP
TRADE BALANCE = EXPORTS OF GOODS AND SERVICES – IMPORTS OF GOODS AND SERVICES
DEFICIT IF IMPORTS EXCEED EXPORTS, SO THE VALUE OF THE TRADE BALANCE IS NEGATIVE
SURPLUS IF EXPORTS EXCEED IMPORTS, VALUE OF THE TRADE BALANCE IS POSITIVE
MANY REPORTED ECONOMIC STATISTICS NEED TO BE ADJUSTED TO MAKE THEM COMPARABLE TO OTHER COUNTRIES. SOME EXAMPLES OF ADJUSTMENTS:
CONVERSION TO A COMMON CURRENCY
DIVISION OF THE STATISTIC BY THE SIZE OF GROSS DOMESTIC PRODUCT (GDP) OR THE SIZE OF THE POPULATION
CONVERT TO GROWTH RATES
GROSS DOMESTIC PRODUCT IS SIMULTANEOUSLY A MEASURE OF PRODUCTION AND INCOME (WHAT IS PRODUCED IS SOLD, AND THE ACT OF SELLING GENERATES INCOME)
Now, it is time for you to test your knowledge of key economic indicators and the effects of economic measurements have on an economy.
The purpose of this assignment is to investigate and to gauge your understanding of key economic indicators by filling out the figure one (1) below and to write up your findings and compare and contrast the United States to that of China.
| Country | United States | China |
| Gross Domestic Product (GDP) (GNI, PPP, ATLAS) |
|
|
| GDP per Capita (GNI PER CAPITA) |
|
|
| Durable and Non-Durable Goods (AS A PERCENTAGE OF GDP) | BEA.GOV DURABLE, 2015 = 7.5 PCT. OF GDP NONDURABLE, 2015 = | GIVE 2014 IF 2015 NOT AVAILABLE; SEARCH ON THE INTERNET |
| Retail Sales (IDEALLY YOU WANT THE REAL GROWTH RATES, WHICH IS THE ANNUAL PERCENT CHANGE) | CENSUS.GOV GET TOTAL FOR 2015, WHICH PRACTICALLY THE SAME AS DEC 2015 TO DEC. 2016 | USE THE INTERNET ; DEC 2016 = X % |
| Housing Starts | CENSUS.GOV OR GOOGLE | USE THE INTERNET |
| Unemployment Rate | SEE BUREAU OF LABOR STATISTICS | WWW.TRADINGECONOMICS.COM |
| Inflation Rates (CONSUMER PRICE INFLATION – GET ANNUAL RATE, NOT MONTHLY RATE) | SEE BUREAU OF LABOR STATISTICS |
|
| Population |
|
|
| Median Household Average Income | USE GOOGLE TO FIND IT | MAKE SURE THAT YOU CONVERT TO DOLLARS |
| Human Development Index (HDI) (2014) |
|
|
| Trade Deficit or Trade Surplus (In millions of dollars; or percent of GDP) | MAKE SURE TO PROVIDE THE CORRECT SIGN ON THE VALUE TO INDICATE DEFICIT OR SURPLUS |
|
Figure 1: Compare and Contrast the United States to that of China
Assignment should include the following:
Title page
Introductory paragraph
Completed table inserted into your Word document
Summary of the United States and China
Summary must be at least 250-words or more in length
Conclusion to summarize your findings, and
Reference page (Reference page must be at the end of your paper and on a separate page).
