1. If domestic saving exceeds domestic investment, one would observe: (a) positive net capital outflow. (b) a trade deficit. (c) a government budget deficit. (d) none of the above.
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- (a) Can current account deficits indicate the health of an economy? Explain (b) Do you expect the balance of payments (BP) curve for a developing country to be flatter than the BP curve for a developed country? Explain. (c) "A Balanced Budget Policy is expansionary when both government spending and taxes increase by the same magnitude." Discuss.The idea that similar foreign and domestic goods, or baskets of goods, should have the same price when priced in terms of the same currency is called (a) purchasing power parity. (b) equity. (c) efficiency. (d) the tragedy of the commons.1 During the coronavirus epidemic last year, GDP contracted by approx. 6% at the same time exports contracted much more (collapse of tourism) during imports so instead. Reasons (all changes here refer to relative changes) that the contraction in GDP was much smaller than the deteriorating balance in foreign trade in goods and service was to: (1) Two of the others are correct. (2) Changes in inventories increased when exports were made that were not produced during the year. (3) Private consumption, C collapsed and this meant that GDP contracted less than balance of exports and imports. (4) The government assisted the economy and contributed to increasing GDP by reducing public consumption, G. (4) National expenditure did not decline as much as GDP, which offset much contraction in the balance of exports and imports.
- 16. Which of the following best describes the concept of foreign direct investment (FDI)? A) Investment made by a company or individual in one country in business interests in another country B) Investment made by the government in domestic industries to promote economic growth C) Investment made by individuals in financial markets within their own country D) Investment made by foreign governments in domestic industries to promote economic development9. The People's Republic of China has an estimated $101.54 trillion of capital with a depreciation rate of 5.2% per year. If its GDP is $20.5 trillion and its saving rate is 45% would we expect China's GDP to be growing or shrinking? a. growing, I> dK b. growing, I dK d. shrinking, I < dKGDP factor cost= ₹400; Depreciation= ₹50; Net Indirect Taxes=20; Net Factor Income from Abroad (NFIA)= 10 Please explain clearly below : Calculate NDP, NNP AT Factor cost and NDP, NNP at Market Price.
- 5. Which of the following statements is (are) correct? (x) The openness ratio is measured by a country's exports minus imports as a percent of GDP. (y) In recent decades, the United States has become tied to other nations through a rise in capital flows. (z) Economists have generally found that economic growth rates have a close relation to education, openness to trade, and communications infrastructure. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (z) only 7. Which of the following statements is (are) correct? (x) The "Made in America" emblem printed on televisions sold by Element Electronics is intended to inform consumers of its commitment to create quality manufacturing jobs in the United States. (y) Workers sometimes face demands for wage reductions from their employers, which threaten to export jobs abroad if wage reductions are not accepted. (z) Critics maintain that U.S. trade policies have mainly benefitted large corporations rather than…(b) Discuss how changes in local real interest rates and foreign interest rates impact the decision to carry out investment by (i) foreigners and (ii) locals.You are so lucky to win NOK 5 million in LOTTO. (A) How does this affect the gross domestic product (GDP) in Norway? You deposit this money in your bank account. (B) How does this affect the savings to Norway?
- 1. An economy is characterised by the following equations: C (Consumption) = 60 + 0.9Yd I (Investment) 10 G (Government expenditure) 10 T (Tax) X СЕхрorts) M (трorts) 20 10 + 0.05 Y %3D (a) What is the equilibrium income? (b) Calculate trade balance. (c) What is the value of foreign trade multiplier ?China has seen a steep rise in total debt from 150% of GDP in 2008 to 250% today (the Economist, Nov. 15, 2018). Suppose the Chinese government addresses this with a package of spending cuts. (a1) What is the effect of China’s fiscal policy on the national saving rate? Use the Solow growth model to predict the effects on China’s steady-state income per capita. (a2) How does your answer change if the fiscal policy reduces government activities that have productivity effects? Please justify your answers along with drawing the graph of the Solow growth model.Year I Year 6 Year 9 Government Spending 591 852 1500 Subsidies 61 75 100 Indirect Taxes 84 98 102 Property Income earned overseas 75 87 150 Property income paid overseas 95 100 200 Imports 169 256 158 Exports 109 120 200 Depreciation 69 75 95 Consumption 678 987 1200 Investment 274 378 1000 3. Gross National Product at Factor Cost: GNP at factor cost GNP at market prices - Indirect Taxes + Subsidies Year 1 Year 6 Year 9