finance question

Kingdom of Saudi Arabia

Ministry of Education

Saudi Electronic University

College of Administrative and Financial Sciences

Assignment 2

Macroeconomics (ECON 201)

Release Date: 22/01/2026-Deadline: 11/02/2026 @ 23:59

For Instructors Use only

Instructors Name: Dr. Mohammad Athar Ali
Students Grade: 00 / 15	Level of Marks: High/Middle/Low

General Instructions PLEASE READ THEM CAREFULLY

The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
Due date for Assignment 2 is by the End of Week 10 (11/02/2023)
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented; marks may be reduced for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.

Assignment 2 (15 Marks)

Suppose people consume 3 different goods. The following table shows the prices and quantities of each good consumed in 2019, 2020, and 2021.
Suppose GDP equals $09 trillion, consumption equals $3 trillion, the government spends $2.5 trillion and has a budget deficit of $450 billion.
What is the Catch-Up Effect? Explain it by giving some Examples. (2 Marks)

Calculate nominal GDP in each of the three years. (2 Marks)
Calculate the rate of inflation for 2020 and 2021 using the GDP deflator as your price index. Assume that 2019 is still the base year. (2 Marks)
Using the quantities from 2019 for your market basket, and 2019 as your base year, calculate the CPI for 2019, 2020 and 2021. (2 Marks)
Using the CPI calculate the rate of inflation. (2 Mark)

Nominal GDP for 2019

Calculate Real GDP in each of the three years, using 2019 as the base year. (2 Marks)

Try to find public saving, taxes, private saving, national saving, and investment.

(3 Marks)

Requirements: short

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