Solucionario Mankiw Completo(Ingles)

CHAPTER

2

The Data of Macroeconomics

Questions for Review
1. GDP measures both the total income of everyone in the economy and the total expenditure on the economy’s output of goods and services. GDP can measure two things at
once because both are really the same thing: for an economy as a whole, income must
equal expenditure. As the circular flow diagram in the text illustrates,these are alternative, equivalent ways of measuring the flow of dollars in the economy.
2. The consumer price index measures the overall level of prices in the economy. It tells us
the price of a fixed basket of goods relative to the price of the same basket in the base
year.
3. The Bureau of Labor Statistics classifies each person into one of the following three categories: employed, unemployed,or not in the labor force. The unemployment rate,
which is the percentage of the labor force that is unemployed, is computed as follows:
Unemployment Rate =

Number of Unemployed × 100
Labor Force

.

Note that the labor force is the number of people employed plus the number of people
unemployed.
4. Okun’s law refers to the negative relationship that exists between unemployment andreal GDP. Employed workers help produce goods and services whereas unemployed
workers do not. Increases in the unemployment rate are therefore associated with
decreases in real GDP. Okun’s law can be summarized by the equation:
%∆Real GDP = 3% – 2 × (∆Unemployment Rate).
That is, if unemployment does not change, the growth rate of real GDP is 3 percent. For
every percentage-point change inunemployment (for example, a fall from 6 percent to 5
percent, or an increase from 6 percent to 7 percent), output changes by 2 percent in the
opposite direction.

Problems and Applications
1. A large number of economic statistics are released regularly. These include the following:
Gross Domestic Product—the market value of all final goods and services produced in a
year.
The UnemploymentRate—the percentage of the civilian labor force who do not have a
job.
Corporate Profits—the accounting profits remaining after taxes of all manufacturing
corporations. It gives an indication of the general financial health of the corporate sector.
The Consumer Price Index (CPI)—a measure of the average price that consumers pay
for the goods they buy; changes in the CPI are a measure of inflation.The Trade Balance—the difference between the value of goods exported abroad and the
value of goods imported from abroad.

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Answers to Textbook Questions and Problems

2. Value added by each person is the value of the good produced minus the amount the
person paid for the materials necessary to make the good. Therefore, the value added
by the farmer is $1.00 ($1 – 0 = $1). Thevalue added by the miller is $2: she sells the
flour to the baker for $3 but paid $1 for the flour. The value added by the baker is $3:
she sells the bread to the engineer for $6 but paid the miller $3 for the flour. GDP is the
total value added, or $1 + $2 + $3 = $6. Note that GDP equals the value of the final
good (the bread).
3. When a woman marries her butler, GDP falls by the amount of thebutler’s salary. This
happens because measured total income, and therefore measured GDP, falls by the
amount of the butler’s loss in salary. If GDP truly measured the value of all goods and
services, then the marriage would not affect GDP since the total amount of economic
activity is unchanged. Actual GDP, however, is an imperfect measure of economic activity because the value of some goodsand services is left out. Once the butler’s work
becomes part of his household chores, his services are no longer counted in GDP. As
this example illustrates, GDP does not include the value of any output produced in the
home. Similarly, GDP does not include other goods and services, such as the imputed
rent on durable goods (e.g., cars and refrigerators) and any illegal trade.
4. a.
b....