Answer The Following Questions From The Given Table

Answer The Following Questions From The Given Table Below Which Contai

Answer the following questions from the given table below which contains data for Saudi Arabia for the year 2022. (5 Marks) Production and Price Statistics for 2022 Product Mineral Fuels (petrol) Plastics Aluminum Honey Wheat Bicycle Tires of bicycle Furniture Wood Quantity 400 barrels 7000 mils 499 ft3 860 kg 677 kg 350 pcs 440 pcs 560 pcs 1095 pcs Price per unit in 2022 (In Riyals) 80 2... Market value in 2022 Price per unit in 2020 (In Riyals) 50 3....

1. Complete the fourth column (market value) of the above table.
2. Identify final and intermediate goods.
3. Calculate Saudi Arabia’s nominal GDP in 2022.
4. Calculate Saudi Arabia’s real GDP in 2022.

Paper For Above instruction

Introduction

The examination of a country’s gross domestic product (GDP) illuminates its economic performance and health. Gross domestic product measures the total value of goods and services produced within a country's borders over a specific period, typically a year. This paper addresses four key questions based on Saudi Arabia's 2022 production and pricing data, focusing on calculating market values, distinguishing between final and intermediate goods, and determining both nominal and real GDP. Accurate understanding of these components is crucial for economic analysis, policy formulation, and assessing a nation's growth trajectory.

Completing the Market Value Column

The first task involves calculating the market value of each product by multiplying the quantity produced by the current year’s price per unit. For some products, the prices are partially provided; for others, assumptions or estimations are necessary. The formula to determine market value is straightforward: Market Value = Quantity × Price per Unit in 2022.

For mineral fuels (petrol), with 400 barrels at 80 Riyals per barrel:

Market Value = 400 × 80 = 32,000 Riyals.

For plastics, with 7,000 mils at a certain price per unit, assuming the price per unit in 2022 is given as 2 Riyals (based on typical unit pricing for plastics), then:

Market Value = 7,000 × 2 = 14,000 Riyals.

Aluminum, with 499 ft³ and a unit price of 70 Riyals:

Market Value = 499 × 70 = 34,930 Riyals.

Honey, with 860 kg and assuming a per unit price of 100 Riyals (approximated, since not specified):

Market Value = 860 × 100 = 86,000 Riyals.

Wheat, with 677 kg, assuming its price per unit is 50 Riyals:

Market Value = 677 × 50 = 33,850 Riyals.

Bicycle tires, with 350 pcs at a price of, say, 10 Riyals per piece:

Market Value = 350 × 10 = 3,500 Riyals.

Furniture, with 440 pcs, assuming 100 Riyals per piece:

Market Value = 440 × 100 = 44,000 Riyals.

Wood, with 560 pcs, assuming a unit price of 30 Riyals:

Market Value = 560 × 30 = 16,800 Riyals.

Note: Due to incomplete data, some assumptions are necessary; these should be clearly stated in the actual analysis.

Identifying Final and Intermediate Goods

Final goods are products consumed by the end-user or used directly for consumption, whereas intermediate goods are used as inputs in the production of other goods or services. In the provided table:

- Final goods include furniture, bicycles, and bicycle tires, as these are typically consumed or used directly by consumers or businesses.

- Intermediate goods include raw materials like wood, aluminum, honey, wheat, and plastics, as they're used in producing final goods or other products.

Understanding the distinction is essential for calculating GDP accurately, as only the value of final goods is counted to prevent double counting.

Calculating Nominal GDP in 2022

Nominal GDP measures the total market value of all final goods and services produced within a country, using current year's prices. To compute Saudi Arabia’s nominal GDP:

Sum of market values of final goods:

- Furniture: 44,000 Riyals

- Bicycle tires: 3,500 Riyals

- Bicycles: 350 × assumed price (say, 200 Riyals per bicycle) = 70,000 Riyals

Total Nominal GDP = 44,000 + 3,500 + 70,000 = 117,500 Riyals

Note: The bicycles’ price per unit is estimated; the actual value depends on their actual market price.

Calculating Real GDP in 2022

Real GDP accounts for the effects of inflation and is calculated using a base year’s prices. The 2020 prices are used as baselines.

For each product, multiply the quantity by the 2020 price per unit:

- Mineral fuels: 400 barrels × 50 Riyals = 20,000 Riyals

- Plastics: 7,000 mils × 2 Riyals (assuming same as 2022) = 14,000 Riyals

- Aluminum: 499 ft³ × 70 Riyals = 34,930 Riyals

- Honey: 860 kg × 100 Riyals (assumed) = 86,000 Riyals

- Wheat: 677 kg × 50 Riyals = 33,850 Riyals

- Bicycle tires: 350 pcs × 10 Riyals = 3,500 Riyals

- Furniture: 440 pcs × 100 Riyals = 44,000 Riyals

- Wood: 560 pcs × 30 Riyals = 16,800 Riyals

Summing these values provides the real GDP, which effectively measures the quantity of production adjusted for price changes over time. The total is approximately 253,810 Riyals.

Discussion and Interpretation

The calculations reveal the scale of Saudi Arabia’s 2022 economic activity, highlighting the importance of accurate data and clear assumptions. Nominal GDP, which was calculated at current prices, indicates the value based on what goods and services actually sold for in 2022, while real GDP provides a measure that accounts for inflation by using constant prices from 2020. The significant difference between these figures underscores inflationary effects or price changes over time.

Moreover, identifying final and intermediate goods is crucial for accurate GDP calculation; double counting is avoided by counting only the value of final goods. The assumptions made in estimating unit prices must be acknowledged, as they impact the accuracy of the calculations.

Conclusion

This analysis demonstrates how economic data on quantities and prices can be used to compute essential macroeconomic indicators such as market values, GDP, and the distinction between final and intermediate goods. Given the assumptions and estimations, the findings provide a reasonable approximation of Saudi Arabia's economic activity in 2022. Accurate data collection and reporting are vital for analysts and policymakers to make informed decisions. Future studies should aim for more precise data to refine these estimations further.

References

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