Macroeconomics Problem Set 1 Essay

To derive the PS musical theme, data on GDP, Consumption, and giving medication expenditures was obtained from the website as detailed in the homework. indeed using excel I was satisfactory to recreate the formula given with the developed data to get the approach numbers. B. The truthful measure of PS was obtained much the alike(p) way as the approximation, only this time I used data for mysterious Sector Savings and Private disposable Income pulled from the database instead of Y, C, and G. C. Attached.Overall its non a terrible approximation. There appears to be a rough five meg dollar inflation in the approximation from the accepted value, but over the wrangle of time the trends remain similar.Every this instant and then you will see a significant dip in the approximation at the same time the true value significantly spikes, but away from that they behave much the same, with a plainly uniform $5 bil over-approximation across the years. E. For these dickens measur es to be the same, there can be no government, and no international trading.The cause for no government is that taxes must be postal code to allow for Y to alkali alone in both denominators as well there must be no government deficit so as to allow for no interest payments. With no taxes and no deficit, it follows that there can be no government spending some(prenominal) (this takes care of removing transfer and interest payments from the starting line equation as well). As for having a closed economy with no imports/exports, this is because the terminal Factor Payments have to equal zero to allow for these equations to equal each other.