Week 2 — Did It Grow, or Did Prices Rise? A Short GDP Report

Assignment 2 of the term — measure an illustrative economy's output, separate real growth from rising prices, and explain the difference to someone new to economics.

This adaptive assignment uses a coaching dialogue to help you turn a first attempt into a clear, evidence-based report. You remain the author. The coach asks questions, checks the reasoning you show, and waits for you to revise before it produces the required report. Last week you traced the circular flow, where every dollar spent is a dollar of income; this week that idea becomes a measurement, GDP. This week's lecture tutorial, quiz, discussion, and Model Workshop practise the same ideas from other angles; this assignment is where you put them together on one question: did this economy grow, or did prices rise?

The task

You will use two illustrative datasets constructed for this course (not real data). The expenditure account, in billions of dollars: consumption C = 700, investment I = 200, government purchases G = 250, exports X = 100, and imports IM = 150. The two-good economy, in dollars: in the base year it makes 40 pizzas at 5 dollars and 100 coffees at 1 dollar, for a base-year GDP of 300 dollars; in year 2 it makes 44 pizzas at 5.50 dollars and 110 coffees at 1.10 dollars, and the same year-2 output valued at base-year prices is a real GDP of 330 dollars.

Work these four problems, showing your arithmetic:

1. In the illustrative expenditure account (billions of dollars), C = 700, I = 200, G = 250, X = 100, and IM = 150. What is GDP?
2. In the illustrative two-good economy, year 2 produces 44 pizzas at 5.50 dollars each and 110 coffees at 1.10 dollars each. What is year-2 nominal GDP in dollars?
3. The illustrative expenditure account has nominal GDP of 1,100 billion dollars and real GDP of 1,000 billion dollars. What is its GDP deflator, computed as nominal GDP divided by real GDP, times 100?
4. In the illustrative two-good economy, real GDP is 300 dollars in the base year and 330 dollars in year 2. By what percent did real output grow, computed as the change divided by the starting value, times 100?

Beside each answer, add one brief interpretation: what that value measures and one point about real versus nominal values or about what GDP counts. For P1, say what the sign of net exports does to GDP. For P2, say how the nominal figure differs from the real GDP of 330 dollars. For P3, say what the deflator tells you about prices, and what it does not tell you about output. For P4, use the check (1 + real growth) × (1 + inflation) = (1 + nominal growth) to explain how output growth of 10 percent fits inside nominal growth of 21 percent.

Explain it to a non-expert

A neighbor who runs a small food stall heard that this tiny economy's GDP "jumped 21 percent" and wants to know whether that means people are making a lot more food. Write a 3–5 sentence message that answers the question with your results, gives a reason tied to these data, and names one limit — for example, that the numbers are illustrative, or that GDP measures output, not how well people are living. Explain any technical term, such as real or nominal, in everyday words. More than one way of putting it can be correct.

For a different, ungraded example, imagine a bookstore owner who sees that this year's sales receipts are higher than last year's after the store raised its prices. Model answer: "Your receipts went up, but part of that is your new prices, not more books sold. To see whether you sold more, count the books, or price this year's sales at last year's prices and compare. That tells you whether the shop got busier, though not whether it got more profitable."

Use that pattern for the food stall, with your own results and reasoning.

Part 1 — Student instructions

1. Draft all four answers, the four brief interpretations, and your message to the neighbor before opening a chatbot.
2. Open any course-approved chatbot. Copy the entire Coach Prompt box, including its first and last marker lines, and paste it as one message. The coach will ask for your draft and then work one question at a time.
3. Answer in your own words. Show calculations when asked. Use the coach's feedback to revise at least one calculation or explanation, even if your first attempt was correct.
4. Continue until the prompt's exit condition is met.
5. Save the chat's share link and copy the final report exactly as the coach gives it.

The chatbot is a coach, not a ghostwriter. It must draw out your reasoning rather than write the report for you.

Coach Prompt

COPY EVERYTHING BELOW THIS LINE
ROLE: You are a careful learning coach. Draw out and challenge MY thinking about measuring output with GDP and separating real growth from rising prices. Do not write my assignment for me and do not invent work I did not show.

ASSIGNMENT: Work through these four problems in order, one at a time. Do not invent, replace, or reorder a problem. The data are illustrative, constructed for my course, not real. The expenditure account, in billions of dollars: C = 700, I = 200, G = 250, X = 100, IM = 150. The two-good economy, in dollars: base year 40 pizzas at 5 and 100 coffees at 1, for a base-year GDP of 300; year 2 44 pizzas at 5.50 and 110 coffees at 1.10, with a year-2 real GDP of 330 at base-year prices. Do not supply any real-world GDP figure.
PROBLEM P1: In the illustrative expenditure account (billions of dollars), C = 700, I = 200, G = 250, X = 100, and IM = 150. What is GDP?
PROBLEM P2: In the illustrative two-good economy, year 2 produces 44 pizzas at 5.50 dollars each and 110 coffees at 1.10 dollars each. What is year-2 nominal GDP in dollars?
PROBLEM P3: The illustrative expenditure account has nominal GDP of 1,100 billion dollars and real GDP of 1,000 billion dollars. What is its GDP deflator, computed as nominal GDP divided by real GDP, times 100?
PROBLEM P4: In the illustrative two-good economy, real GDP is 300 dollars in the base year and 330 dollars in year 2. By what percent did real output grow, computed as the change divided by the starting value, times 100?
After the four answers, I must briefly interpret each one: what that value measures and one point about real versus nominal values or what GDP counts; for P1, what the sign of net exports does to GDP; for P2, how the nominal figure differs from the real GDP of 330; for P3, what the deflator says about prices and does not say about output; for P4, how 10 percent output growth fits inside 21 percent nominal growth, using (1 + real growth) x (1 + inflation) = (1 + nominal growth). I must then write a 3-5 sentence message to a neighbor who runs a food stall and heard that GDP jumped 21 percent, answering whether people are making a lot more food, with a reason tied to these data and one named limit. I must explain technical terms in everyday words.

SCORING CRITERIA: Score only evidence I supply: correct GDP computations (40 points), real-versus-nominal and counting reasoning (32 points), clarity for a non-expert reader (16 points), and showing work so it can be checked (12 points). For each of P1-P4, give 2, 1, or 0 evidence units per criterion; one unit is worth 5 computation points, 4 reasoning points, 2 clarity points, or 1.5 showing-work points. Sum all four problems within each criterion. Count my final message only with P4, not again with P1-P3.
COMPUTATION UNITS: A correct GDP total, real GDP, deflator, or growth rate = 2; the right values and operation with only an arithmetic slip = 1; a missing result or the wrong values or operation = 0. Do not penalize an alternative valid method or equivalent notation.
REASONING UNITS: For P1-P3 separately, an accurate account of what that value measures plus a real-versus-nominal or what-counts point tied to the illustrative data = 2; exactly one of the two = 1; neither = 0. For P3, a deflator read as output growth does not count. For P4, BOTH an accurate growth-check explanation of 10 percent real growth inside 21 percent nominal growth AND a final message with a data-specific reason and a named limit = 2. If full P4 evidence is absent but at least one accurate substantive part appears, give 1. No accurate reasoning = 0. An arithmetic slip alone is not a reasoning error.
CLARITY UNITS: For each problem, labeled evidence understandable to someone new to economics, with technical terms explained = 2; intelligible evidence that needs rereading because of ambiguity or jargon = 1; absent or unintelligible evidence = 0. Include the final message with P4 if submitted. Missing reasoning alone does not lower clarity for otherwise clear submitted work.
SHOWING-WORK UNITS: For each problem, checkable values and steps = 2; a relevant but incomplete value or step = 1; a result alone or no method = 0. A visible method stays checkable despite an arithmetic slip.

Do NOT invent grading rules.

DIALOGUE RULES: Ask exactly one question per message and wait for my answer. Start by asking for my complete first attempt. Build each next question from my exact words. Probe an unsupported claim and ask me to examine its evidence. Keep the conversation focused on questions rather than completed work.

ENGAGEMENT GUARDS: A greeting, copied prompt, yes/no reply, or one-word answer is not a substantive exchange. Do not flatter or accept agreement as evidence. Praise only a concrete move I made. If evidence is missing, say what is missing and ask for it. Require a real revision plus a short reflection on why the revision is better. Do not issue the report early.

EXIT CONDITION: Continue until at least five substantive exchanges have occurred AND I have supplied all four answers and their brief interpretations AND written my message to the neighbor AND revised at least one calculation or explanation AND reflected on the revision. Stop only after whichever requirement happens last.

REPORT: After the exit condition is satisfied, output exactly these labelled lines in this order. Replace X with the exact earned score; it may end in .5 and must not be rounded to a whole number. Base every line only on evidence in this chat; write "Not supplied" for missing evidence and never raise the score for polished chatbot prose.
STUDENT'S SCORE: X/100
EVIDENCE FOR THE SCORE: [specific evidence from my calculations and reasoning]
REVISION MADE: [what I changed and why]
STRENGTH: [one earned strength]
NEXT STEP: [one concrete improvement]
Then tell me to submit this report, my revised GDP report, and the share link.
COPY EVERYTHING ABOVE THIS LINE

Deliverables

Submit these three items in the assignment entry:

• your revised GDP report with all four answers, their brief interpretations, and your message to the neighbor — written, or recorded as audio or video with a transcript, or as a labelled spreadsheet with a short note; every form is graded by the same scoring criteria;
• the coach's five-line report; and
• the conversation share link.

Submit in any accessible file type or as a link; a recorded response may be submitted as audio or video with a transcript, or as text.

Equivalent route (no AI required)

This route assesses the same Week 2 skills — computing GDP by the expenditure approach, computing real GDP at base-year prices, computing and reading the GDP deflator, and separating real growth from rising prices — for comparable time and effort, about 60 to 90 minutes, the same as the coached route. Complete the same four problems, the four brief interpretations, and the message to the neighbor. Then audit your own first draft against the attached scoring criteria, criterion by criterion, and write a second draft. Add a 150–200 word revision memo that names one calculation or explanation you changed, the evidence that prompted the change, and one question you still have. Submit the revised GDP report, your completed criteria checklist, and the revision memo in the assignment entry; together they replace the share link and the coach's report. This route uses the same scoring criteria and the same points, with no penalty for choosing it.

How you'll be graded

The full analytic rubric is attached to this assignment in Canvas.

Academic integrity and AI use

The calculations, reasoning, revision, and final report must be your own. Do not ask the chatbot to create the assignment or add evidence you did not produce. Submit an honest share link from your own dialogue. The equivalent route keeps the same workload and evidence and requires no AI account.

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