Course: ECO 110

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Unit 6 Practice Problem

Unit 6 Practice Problem
Suppose you are given the following data for an economy:

Personal consumption | $1,000
Home construction | 100
Increase in inventories | 40
Equipment purchases by firms | 60
Government purchases | 100
Social Security payments to households | 40
Government welfare payments | 100
Exports | 50
Imports | 150

Use this information to calculate the nominal (current dollar) GDP.

1. Describe the difference between nominal GDP and real GDP.  Why do we care?
2. What is the civilian unemployment rqte?
3. What is the CPI and what does it measure.  Why do we need to pay attention to the C if we are trying to look at price increases for all parts of the economy?