See attached for instructions.Question 1: No format required- minimum 200 words
If you were in charge of regulating the way gross domestic product was calculated, would you include illegal activities in the
calculation? Why, or why not?

Question 2:
Determine whether each of the following would cause a shift of the aggregate demand curve, a shift of the aggregate supply curve,
a shift in neither curve, or a shift in both curves. If a shift is caused, indicate which curve shifts, and in which direction it
shifts. What happens to aggregate output and the price level in each case?

The price level changes.
Consumer confidence increases.
The supply of resources decreases.
The wage rate decreases.
There is no minimum word requirement for responses. Please label each section of your response with the appropriate number (1, 2, 3, 4).

Question 3:
Compare the classical economic theory that was used prior to the Great Depression to the Keynesian theory used after the Great Depression.
Your response must be at least 200 words in length.

Question 4:
Explain how gross domestic product is calculated using each of the following: the income approach and the expenditure approach.
Your response must be at least 200 words in lengthECO 2302, Principles of Macroeconomics 1

Course Learning Outcomes for Unit III

Upon completion of this unit, students should be able to:

3. Discuss how various national economic indicators relate to economic growth.
3.1 Explain the shapes of the aggregate demand and supply curves and how they interact to

determine real gross domestic product (GDP) and the price level for a nation.
3.2 Describe the differences between classical and Keynesian theories.
3.3 Explain the two ways of calculating GDP.

Learning Outcomes

Learning Activity

Unit Lesson
Chapter 5
Unit III Assessment

Unit Lesson
Chapter 5
Unit III Assessment

Unit Lesson
Chapter 6
Unit III Assessment

Required Unit Resources

Chapter 5: Introduction to Macroeconomics

Chapter 6: Tracking the U.S. Economy

Unit Lesson

This unit is all about “big picture.” In Unit II, we examined supply and demand of individual products in an
economy, such as the demand for pizza. Now, in Unit III, we are moving to the demand for everything
produced in the economy. We are no longer looking at the price of pizza alone but at the average price of all
goods and services produced. Again, start thinking “big picture” as you enter Unit III.

One of the most used economic indicators of a nation’s economic health is gross domestic product (GDP).
News stories about the economy report GDP. Politicians discuss GDP in political debates. Investment groups
follow GDP. Needless to say, GDP is one of those economic indicators that carries a lot of weight when
evaluating the economic health of an economy. Have you ever wondered what GDP means? McEachern
(2019) tells us that GDP measures the market value of all final goods and services produced in an economy
during a given period; this period is usually a year. That means that calculating the GDP for the United States
would mean we would have to add up the value of all the goods and services from dog food to cab rides. It is
easy to see why GDP is one of the most widely reported economic indicators.

GDP is extremely helpful when trying to compare different economies. For instance, the GDP for the United
States in 2016 totaled $18.62 trillion U.S. dollars and equaled $11.19 trillion U.S. dollars for China that same
year (Google, n.d.). The GDP estimates for the United States and China suggest that the value of output of
goods and services produced in the United States was 66% higher than the value of output of goods and
services produced in China in 2016. This is an example of how GDP can be used to evaluate the economic
condition of two separate nations.


Macroeconomics and
the U.S. Economy

ECO 2302, Principles of Macroeconomics 2



Estimates for the United States show that GDP in 2016 was $18.62 trillion and was $13.86 trillion in 2006
(McEachern, 2019). These estimates show that the economy of the United States grew

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