National Income Accounting

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Question 1. National Income Accounting (25 marks)
Consider an economy where only three types of vehicles are produced and sold, namely:
Bicycles, Books and TVs. The following table shows the quantity sold (in millions) and the
price per unit of each good:
2011 2012 2013 2014 2015
Quantity Price Quantity Price Quantity Price Quantity Price Quantity Price
Bicycles 40 $3 45 $4 50 $4.50 65 $5 70 $5
Books 200 $2 200 $3.75 210 $4 310 $2.50 375 $2.50
Textbooks 15 $4 15 $6 13 $7 17 $7 20 $7
Copy and paste the above table in excel to conduct the computations for each question.
Present your results clearly in a table as they apply to each question.
a) Compute the yearly total value for each good and the yearly nominal GDP for the
economy. What is the growth rate in nominal GDP for each year?
b) Assume 2012 is the base year. Compute the yearly real GDP for the economy. What is
the growth rate in real GDP for each year? Compare this growth rate to the nominal
GDP growth rate.
c) Compute the GDP deflator for each year. What is the yearly change (in percentage
terms) in the overall price level relative to the base year?
2
d) Would you say that the growth rate in nominal GDP for each year is due more to the
increase in the physical volume of output or the increase in prices?
Question 2. National Income Accounting (30 marks)
For this question you will need to retrieve the following data from Statistics Canada’s
“Canadian Economic Dashboard and COVID-19” for the 5-month period, October 2020 to
February 2021. Use the Add/Remove data option and click on the NAICS option to select
the industries data series specified below for download and click apply:
1. GDP at basic prices by industry: Table 36-10-0434-01
a. All industries data series
b. For NAICS 11 to 91 i.e. Agriculture to Public Administration (You will
have to scroll to the bottom to see all these industries)
2. Actual hours worked: Table 14-10-0289-01
a. All industries data series
b. All the 5 goods producing sector industries and all 11 service producing
industries.
Only report the graphs and calculations for these questions. Do not report the full data
series. Clearly label the axes and lines in your graphs.
a) Compute an hours index for the all industries data series and each of the 16 industries
by calculating the hours worked in each month relative to October 2020 and multiply
by 100. Provide a graph of the hours index for the 5-month period for the all industries
series and the 16 industries in one graph. Which industry had the largest decline?
b) For the all industries data series and each of the industries calculate the GDP in each
month relative to October 2020 and multiply by 100. Note that there are more industries
compared to (a). Provide a graph similar to (a) of the results for the 5-month period.
Which industries experienced the largest decline in real GDP? Do the months of
substantial declines match with timing of the second and third wave of COVID-19
outbreaks?
c) Based on your answers to parts (a) and (b), what happened to overall labour productivity
in all industries, measured as GDP per hour worked over this 5-month period. Give two
factors that affect labour productivity.

Sample Solution

Potassium-sparing diuretic drugs Possible mechanisms for these observations include an increased tubular secretion of digoxin to account for the increased renal clearance and a decrease in the hepatic elimination rate of digoxin to account for the decrease in extra renal clearance. This combination of quinidine and spironolactone caused significant reductions in total body clearance of digoxin, no renal digoxin clearance and digoxin renal clearance beyond the reductions induced by either drug alone . The clinical significance of an anticipated elevation of steady state serum digoxin levels induced by the potassium-sparing diuretic drugs is not clear. The effects of the potassium-sparing diuretic drugs on steady state serum digoxin levels have not been adequately evaluated. The potassium sparing diuretic drugs, spironolactone, triamterene and amiloride, have been reported to induce changes in digoxin kinetics . Since the magnitude of this interaction of potassium- sparing diuretic drugs has not been established, measurement of the steady state serum digoxin levels may be warranted. Potassium-sparing diuretic drugs have different mechanisms and sites of action, which may account for their differing effects on digoxin pharmacokinetics. Triamterene does not alter renal elimination of digoxin, but reduces the extra renal clearance of digoxin. Patients with cardiac disease are frequently treated with multiple medications and the combination of a potassium- sparing diuretic drug, digoxin and quinidine is not unusual.

– Miscellaneous Drug Interactions With Digoxin

Anti-inflammatory drugs : Indomethacin therapy did not alter digoxin pharmacokinetics in healthy adult volunteers with normal renal function , but was found to cause an increase of 45% in serum digoxin levels in preterm infants when co-administered with digoxin for the treatment of patent ductus arteriosus . The increase in serum digoxin level associated with indomethacin may also apply to adult patients since a l

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