PROBLEM SET 2
1. The following data show the GDP of the Country Sahara (in Billions €). Calculate the quarterly
annualized growth rate (for Q4 of 2017), the interannual growth rate (for Q3 of 2017), and the annual
growth rate. Do the different results seem surprising to you? Which one is the better measure?
Annualized growth rate=
Interannual growth rate==
Annual growth rate=
Annual growth rate=
2. On the Basic Macroeconomic Model, which of the following national income accounting identities is
correct?
a) Y = C + I + G + X-M
b) Spr + Spu +M - X = I (Spu=G-T=DEF, so SPr=-Spu-M+X+I, public service can be on negative
numbers, if the government expenditure is higher than the taxes)
c) Spr - I = DEF + X - M (Spr=DEF+BT+I)
d) All of them
I think all of them are correct because they are formula of the same, and by reduction you can deduce
c)
3. Do you agree with the following national income accounting identities?
a) Spr - I = DEF – BT (Yes, because the trade balance can be a negative number if imports are more
than exports, so it is the basic formula of the private sector services=I+DEF+BT)
b) YD - C = I + (G-T) + (X-M) (No, because the available income is the same as the income(GDP)-
expenses(T), so it no make sense to operate with the same numbers)
c) Spr + Spu = I + (X-M) (yes, because is the same formula as the basic for calculate Private Sector
Services= I+DEF+BT: DEF=Spu (G-T), and it can be negative if the government expenditure is
higher than the taxes); BT=X-M)
4. Prove that if the goods market is at equilibrium (that is, Y = C+I+G+X-M), then the financial market
is also at equilibrium (that is, Spr+Spu+Sfs = I, where Sfs represents the savings from the foreign
sector M-X).
Private sector services= Spr= available goods-consumptions;
Spr=income-expenses-consumptions;
Spr=GDP-taxes-consumption;
Spr=C+I+G+(X-M)-T-C;
Spr =I+(G-T)+(X-M)
Spr=I+DEF+BT
Clara Ramos García, 100386398
Group 18, Economics II (Macroeconomics)
