## Unit 7 Assignment: Team Assignment - Exchange Rate Regimes

Assignment

In this assignment, you will evaluate the various components of the Gross Domestic Product (GDP) and factors that affect the GDP components. You will also compute the growth rate of U.S. real GDP and compare the average with the expected growth rate of U.S real GDP.

Instructions: This assignment presents scenarios in which you will examine the impacts of net exports on the U.S. economy by evaluating the components of the GDP. It requires a combination of short paragraph answers, computations, and completion of a 450–500-word essay. You are required to follow proper APA format. Read the Criteria section below for more information before you begin this assignment.

In this assignment, you will be assessed on the following Outcome:

PC-1.2: Contribute to team goals and objectives through active participation and collaboration.

Questions

1. Why does inflation make nominal GDP a poor measure of the increase in total production?
2. Which component of GDP will be affected by each of the following transactions involving FlyCheap Airlines? Briefly explain.
Hint on the components of the GDP: GDP = C + I + G + Nx
1. You purchase a ticket on a FlyCheap Airlines to visit your niece.
2. FlyCheap Airlines purchases a new jetliner from Boeing.
3. FlyCheap Airlines purchases new seats to be installed on a jetliner it already owns.
4. FlyCheap Airlines purchases 200 million gallons of fuel.
5. The city of Nashville agrees to spend funds to extend one of the runways so that FlyCheap will be able to land larger jets.
1. 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

1. Calculate the growth rate of real GDP for each year from 1993-1994, 1994-1995, 1995-1996, and 1996-1997. Show your work.
2. Calculate the average annual growth rate of real GDP for the period from 1993 to 1997. Hint: Compute the average for the growth you calculated under (i) above.
3. How does the average annual growth rate you calculated in (ii) above compare to the average GDP growth rate the U.S. normally expects?
1. Answer the following questions in a 450–500-word essay.

Describe the relationship between labor productivity and long-run economic growth. How do technological advancements impact labor productivity? What are the major factors that affect labor productivity?

Criteria

• Your team assignment should be submitted in the template provided under Course Documents.
• The assignment should include a highly developed purpose and viewpoint.
• It should also be written in Standard English and demonstrate exceptional content, organization, style, and grammar and mechanics.
• There should be no evidence of plagiarism. If you are unsure what constitutes plagiarism, please review the plagiarism policy.
• Respond to the questions in a thorough manner, providing specific examples where asked.
• Add references in APA format as a separate page at the end of your paper.
• Your sources and content should follow proper APA format. Review the APA formats found in the Writing Resources accessed through the Academic Success Center within the Academic Tools area of the course.
• Review the grading rubric to ensure all points have been captured in the paper.