EC 214 Week 2 Post-Class Assignment1
Due: March 14, 2025
The GDP data we will look at is from the United Nations’ National Accounts Main Aggregates
Database, which contains estimates of total GDP and its components for all countries over the
period 1970–Present. We will look at how GDP and its components have changed over time.
To answer the questions below, download the data and make sure you understand how the
measure of total GDP is constructed.
Go to the United Nations’ National Accounts Main Aggregates Database website. On
the right-hand side of the page, under ‘Data Availability’, click ‘Downloads’.
Under the subheading ‘GDP and its breakdown at constant 2015 prices in US Dollars’,
select the Excel file ‘All countries for all years – sorted alphabetically’.
Save it in an easily accessible location, such as a folder on your Desktop or in your
personal folder.
There are three different ways in which countries calculate GDP for their national accounts, but
we will focus on the expenditure approach, which calculates gross domestic product (GDP) as:
GDP=Household consumption expenditure
+General government final consumption expenditure
+Gross capital formation
+(Exports of goods and services − imports of goods and services)
Gross capital formation refers to the creation of fixed assets in the economy (such as the
construction of buildings, roads, and new machinery) and changes in inventories (stocks of
goods held by firms).
Question 1: Rather than looking at exports and imports separately, we usually look at the
difference between them (exports minus imports), also known as net exports. Choose two
countries: China and one developing country2. For each country, create a new row that shows the
values of net exports in each year. Make sure to give each row an appropriate label.
Question 2: Evaluate the components over time, for two countries of your choice.
1
The assignment is based on Unit 4 in The CORE team, Doing Economics. Available at:
https://www.core-econ.org/doing-economics/. [Accessed on February 25, 2024].
2
For a list of these countries, see Tables A-C in the UN country classification document.
1
a) Create a new row for each of the four components of GDP (Household
consumption expenditure, General government final consumption expenditure,
Gross capital formation, Net exports). To make the charts easier to read, convert
the values into billions (for example, 4.38 billion instead of 4,378,772,008).
Round your values to two decimal places.
b) Plot a separate line chart for each country, showing the value of the four
components of GDP on the vertical axis and time (the years 1970–Present) on the
horizontal. (Use more than one line chart per country if necessary, to show the
data more clearly). Name each component in the chart legend appropriately.
c) Which of the components would you expect to move together (increasing or
decreasing together) or move in opposite directions, and why? Using your charts
from Question 2(b), describe any patterns you find in the relationship between the
components. Does the data support your hypothesis about the behaviour of the
components?
Question 3: Another way to visualize the GDP data is to look at each component as a proportion
of total GDP. Use the same countries that you chose for Question 2.
a) For each country, create a new row in Excel to show the sum of all four
components (remember that this total may not add up to the reported GDP). Next,
create a new row for each component, showing its proportion of total GDP (as a
value ranging from 0 to 1), rounded to two decimal places. (Hint: to calculate the
proportion of a component, divide the value of that component by the sum of all
four components.)
b) Plot a separate line chart for each country, showing the proportion of the
component of GDP on the vertical axis and time (the years 1970 to the latest year
available) on the horizontal axis.
c) Describe any patterns in the proportion of spending over time for each country,
and compare these patterns across countries.
d) Compared to the charts in Question 2, what are some advantages of this method
for making comparisons over time and between countries?
