Unit 7 Assignment;Student Name;Please answer the following questions. Submit as a Microsoft Word document to the Dropbox;when completed.;Why does inflation make nominal GDP a poor measure of the increase in total production?;Which component of GDP will be affected by each of the following transactions involving;FlyCheap Airlines? If you do not believe any component will be affected, briefly explain why.;i. You purchase a ticket on a FlyCheap Airlines to visit your niece.;ii. FlyCheap Airlines purchases a new jetliner from Boeing.;iii. FlyCheap Airlines purchases new seats to be installed on a jetliner it already owns.;iv. FlyCheap Airlines purchases 200 million gallons of fuel.;v. A French citizen purchases a ticket to fly on a FlyCheap flight from Paris to New York.;vi. The city of Nashville agrees to spend funds to extend one of the runways so that FlyCheap will be able to land larger jets.;Use the table to answer the following questions.;Year;Real GDP (Billions of 2000 Dollars);1993;$7,113;1994;7,101;1995;7,337;1996;7,533;1997;7,836;i. Calculate the growth rate of real GDP for each year from 1994 to 1997.;ii. Calculate the average annual growth rate of real GDP for the period from 1994 to 1997.;iii. How does the average annual growth rate you calculated in (ii) above compare to the average growth rate the U.S. normally expects?;In an open economy, trade is allowed between countries. Assume a consumer purchases $1,000 worth of furniture manufactured in China. Answer the following;a. Which component(s) of GDP are impacted by this purchase?;b. Does GDP increase, decrease or stay the same? Briefly explain why.;c. Does your answer change if the company in China is a U.S.-owned company? Why or;why not?
Paper#19495 | Written in 18-Jul-2015Price : $38