Econ141 Macroeconomics|Real Gdp Assessment Answer

Using the StatsNZ nominal GDP (NGDP), real GDP (RGDP) and resident populationdata (RPop) you have downloaded, complete the following. You may wish to enter thisdata into the Part 1 data sheet in theEcon141 20-1 assignment dataExcel file.1. Graph the two GDP series you have downloaded - make sure to label both. PlaceGDP on the vertical axis and time on the horizontal axis.2.(i) How much did NGDP grow between 2004 and 2020?(ii) How much did real RGDP grow between 2004 and 2020?3. If one grew more than the other what does this mean? Explain in 50 words or less.4. Using the resident population data, calculate RGDP per capita for each year from2004-2011. Given this, answer the following questions:(i) In percentage terms, how much did RGDP per capita grow per annum onaverage between 2004 and 2008?(ii) What about 2008 to 2011?[Hint: the average growth rate per annum equals(GDP in the final yearGDP in the initial year)1Number of years−1.]5. Assume that RGDP per capita in NZ typically grows at about 1.3% p.a. normally.Discuss the differences in RGDP per capita growth in the 2004-2008 and 2008-2011periods in terms of our concept of booms and busts. Do this in 100 words or less.Continued overpage. .

Assignment 12020 2/3Part 2[1 mark each; 10 marks total]This part builds on the analysis from part 1, by looking at the components of GDP forthe years of interest. The GDP component data has been downloaded for you. Refer tothe Part 2 data sheet in theEcon141 2020-2 assignment dataExcel file on Blackboard(in the Assignment area). You will need to calculate the per capita series yourself.1. Calculate private investment per capita for each year from 2004-2020.2. What are the per capita growth rates in private investment for the periods 2004-2008 and 2008-2011? In 50 words or less, state what this change in the growth ofprivate investment tell us in terms of aggregate expenditure?3. Calculate government investment per capita for each year from 2004-2011.4. It appears that there was an economic slowdown during the 2008-2011 period. As-sume that we can view this as a shock to planned expenditure, due to uncertaintyabout the world. In under 200 words, answer the following question: Was gov-ernment investment used as stabilisation policy following the slow-down kicking induring 2008 (the year to March 2009)? (Note, you only need to discuss this in termsof our demand model of Income-Expenditure, IS-MPR, and Aggregate Demand.)5. Typically we might expect higher government spending to crowd out private invest-ment. In under 100 words, explain the rationale for this expected relationship.6. Graph the Reserve Bank’s Official Cash Rate (OCR) series (2004-2020). Place theOCR on the vertical axis and time on the horizontal axis. In 50 words or less,describe what has happened to the OCR over this period.Answer each of the following questions in under 200 words.7. What sort of shock describes the economic events materialising in the global econ-omy from mid-late 2008?8. If government spending were increased, what would occur to interest rates accordingto the theory presented in class?9. Answer the following with reference to the Income-Expenditure model with theplanned investment function ofI(r) as presented in lectures. Assume that expectedreturns on investment have risen over time after recovering from the GFC shock in2008. (i) How would this change be represented the investment function? (ii) Notingwhat you found in question 6, how might changing interest rates have influencedprivate investment between 2011-2020?10. From 2008, how might monetary policy (as reflected in the OCR) have affectedthe degree of crowding out resulting from fiscal policy (as reflected in governmentexpenditure)?