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SEMESTER SPRING 2012
Macroeconomics (ECO403)
Assignment No. 01

Due Date: 12th April, 2012 Marks: 15

Assignment:

Chad is under developed country located in Central Africa. Landlocked Chad's
economic development suffers from its geographic remoteness, lack of infrastructure,
lack of basic necessities and political turmoil. About 85 % of the population depends on
the agriculture including the herding of livestock. Because of weak agricultural
economy, majority of the people belong to middle class and live in cottages. Suppose,
during year 2007, among total population, 5 billion people were unemployed and 175
billion people were employed. During the same year, people consumed durable goods
worth Rs.300, non-durable goods worth Rs.500 and services worth Rs.300. In this year,
government planned to develop the economy and used Rs.900 for government
expenditures. This amount was used for education expenditures, health expenditures,
for discovering new oil resources and for industrial sector seriously. These decisions
not only improved the sectors mentioned above but also stimulated the business
investment. Businessmen invested Rs.300 for the development of their business and
used new technology and ways. Government expenditures and businessmen
investment affected the international trade positively. In this year, Chad exported crude
oil, processed meat and cotton for Rs.350 and imported commodities for domestic use
of worth Rs.150. Next year, China and USA invested in the oil sector and built refineries.
This project solved the problem of unemployment for the year 2008, by virtue of this,
unemployed and employed values were 3 billion and 187 billion respectively.

Requirements:

Use the above data to calculate Chad's:
a. Gross domestic product (GDP) for year 2007.
b. Net exports (NX) for year 2007.
c. Labor force for year 2007 and 2008.
d. Unemployment rate for year 2007 and 2008.
e. GDP deflator for year 2007 if real GDP during this year is Rs.2100.

Marks:(4+2+3+3+3)

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