2018 May (GDP/CPI) Paper 3 HL

2018 May (GDP/CPI) Paper 3 HL

(e) (i) Using the data in Table 3 above, calculate the level of investment.

NGDP – C – G – (X-M) = Investment

   109 – 71 – 32 – (-3) = 9 billion

 

or

 

 C + I + G + (X-M) = NGDP

 71 +? + 32 + (12-15) = 109b

 

(ii) State two possible reasons for the increase in investment by firms.    

       

(iii) The increase in investment results in both short-run and long-run effects on the economy. Draw and label the two curves that illustrate the effect.

Must show the AD curve and the LRAS curve shifting right.

 

Label – Label – Label

 

(f) Calculate the Real growth rate in 2018 using the Table 4.

2018 RGDP = 109/99.4 x 100 = (109.66 RGDP 2018)

2017 RGDP = 107/101.2 x 100 = (105.73 RGDP 2017)

 

Change = (New – old)/old x 100

 

(109.66 – 105.73) / 105.73 x 100 = 3.72%