Assignment 2: Measuring the Economy’s PerformancePrepare a 4-6 page analysis by answering the...

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Assignment 2: Measuring the Economy’s Performance
Prepare a 4-6 page analysis by answering the questions below. Be sure to cite your references using APA format.
For this assignment, you should use the information in the textbook and the information found on the official government website: www.bea.gov/index.htm
Based on the information contained in the textbook and on the Web site above, answer the following questions:

What does gross domestic product (GDP) tell us? How did GDP change from 2008? What caused these changes? What is real GDP? What was real GDP in 2008 and has it changed since 2008?

What was national income (NI) for 2008? What does national income tell us? What is the difference between GDP and NI? How has NI changed since 2008? What caused these changes?

What was disposable income (DI) for 2009? What does disposable income consist of? How did DI change from 2008? What caused these changes?

Does GDP measure the well-being of society? Why or why not?

What was GDP in 2008 (sometimes called GSP) for your state? How does your state rate when compared to other states?

All submissions must be original and all resources must be acknowledged.
Name your document SU_ECO2072_W2_A2_LastName_FirstInitial.
Submit your document to the W2: Assignment 2 Dropbox by Tuesday, May 28, 2013.

Assignment 2 Grading Criteria	Maximum Points
Met the criteria for the correct responses to the questions assigned. (6 points each)	30
Justified ideas and responses by using appropriate examples and references from texts, web sites, and other references or personal experience.	10
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation.	10
Total:	50

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Robert · Accepted Answer

Measuring the Economy’s Performance
Gross domestic product (GDP) is one of key macroeconomic indicators that are used to measure the economic health of a country. It is the monetary value of all final goods and services produced within the geographical boundary of a country in a specific period of time, usually annually or quarterly.  One can interpret GDP as the size of the economy. It includes all the private and public consumption, government outlays, investments and net of export minus import within the country.
The GDP of US in the first quarter of 2008 was USD 14, 273.97 billion. In the first quarter of 2009 it was 13, 923.4 billion. It was USD 14,270.3 billion, USD 14,814.9 billion and USD 15,478.3 billion in the first quarters of 2010, 2011 and 2012, respectively. In the first quarter of 2013 US GDP stands at USD 16,010.2 billion. So looking at the GDP figures it tells us that US GDP declined in the first quarter of 2009 from the first quarter of 2008 but it has increased since then. The positive change could be attributed to the increase in the production and/or increase in the overall price level of the economy.  
Since increase in GDP could be attributed to either increase in production or increase in overall price level or both and thus it may not provide us with the real health of the economy. As economist we are interested in providing an index of the total quantity of goods and services the economy is producing that should be independent of the by changes in the prices of those goods and services. Hence we need the understanding of the real GDP.  Real GDP is the production of goods and services valued at constant prices. Real GDP is calculated using the price of a base year.  The price of the base year is then used to evaluate the quantities of each year concerned. Thus using base year price we can compare the values of the actual quantities that are being produced in the economy and that will help in providing a better understanding of the health of the economy.
Using 2005 as the base year, the real GDP was USD 13,266.8 billion in the first quarter of 2008 while it was USD 12,883.5 billion in the fourth quarter of 2008. In the first quarter of 2009 it was USD 12,711.0 billion. It was USD 12,947.6 billion, USD 13,183.8 billion and USD 13,

Assignment 2: Measuring the Economy’s Performance Prepare a 4-6 page analysis by answering the questions below. Be sure to cite your references using APA format. For this assignment, you should use...

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