2. Use the data below to answer the questions that follow.ItemConsumption expenditureGovernment purchasesAmount (billionsof dollars)350Interest and investment incomeProfit of corporations & public enterprisesIncome from farms and unincorporated businessesWages, salaries, and supplementary labour incomeCapital consumption allowance (depreciation)InvestmentExportsImports(Indirect) taxes less subsidiesa) Calculate net exports.b) Use the expenditure approach to calculate GDP.c) Use the income approach to calculate GDP.10035555032550150465675

a. net exports = -10Net exports (NX) = Exports - ImportsNet exports = 46 - 56Net Exports = -10 b.…

Answered: 2. Use the data below to answer the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Problem 1 The table below contains data about a hypothetical economy comprised of three firms. Value of sales Intermediate goods Wages Interest payments Rent Profit Total expenditure by firm Value added by firm Ore Firm ● 4200 (ore) 0 2000 1000 200 1000 4200 Steel Firm 9000 (steel) 4200 (iron ore) 3700 600 300 200 9000 • Calculate the value added by firm; ● Calculate the total factor income; ? Calculate the GDP of the economy: 1) Using the national spending approach; 2) Factor income approach; 3) Value added approach. Car Firm 21500 (car) 9000 (steel) 10000 1000 500 1000 21500 ? Total factor income ? ? ? ?
3. Categories of expenditures Darnell and Eleanor Cohen live in Conshohocken, PA. Their son, Jacques, owns his own plumbing business. For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction Darnell buys a sweater made in Guatemala. Darnell's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China. Eleanor gets a new video camera made in the United States. The Pennsylvania Department of Transportation, a state administration, fixes potholes along PA highway 23, which feeds into the center of Conshohocken. Jacques buys a new set of tools to use in his plumbing business. с □ I □ G □ X □ M □ □
1. In the above case study, identify TWO factors that are responsible for the rise in Japan’s Gross Domestic Product (GDP)
3. Categories of expenditures Darnell and Eleanor Cole live in Conshohocken, PA. Their son, Jacques, owns his own plumbing business. For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction The Federal Aviation Administration expands the runways at Philadelphia International Airport, which is just a few miles from Darnell and Eleanor's house. Eleanor buys a new BMW, which was assembled in Germany. Darnell's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China. Eleanor gets a haircut. Jacques buys a new set of tools to use in his plumbing business. с O I O G X M O O
Question 3 Participants Cost of Value of Materials Sales Farmer $ 0 24 $ 100 Cone factory 100 250 and ice cream-maker Middleperson 250 400 Vendor 400 500 (i) Calculate the value added at each stage of production (ii) Calculate the contribution to GDP from the good
5) Economic activities in a three-sector hypothetical economy for 2020 are given below. Compute GDP using both the expenditure approach and the factor payment approach. There is no government and no depreciation A. Agriculture: thousands of self-employed farmers. Manufacture: Sigma Auto, Inc. (a car producing company) Service: Super M (a chain of food market) B. Sigma Automobile produced 2,000 small cars, which it sold at $6,000 each, and 200 trucks, which it sold at $8,000 each. Consumers bought 1600 of the cars, and the remaining 400 cars were exported to abroad. Super Market bought all the trucks. C. Sales at Super M markets amounted to $28 million, all of it sold to consumers. D. Self-employed farmers sell all of their products to Super M. Sigma Auto Super M Farmers Wages $7,600,000 $9,000,000 $0 Interest 200,000 400,000 1,400,000 Rent 400,000 2,000,000 4,000,000 Purchase of food 14,000,000
1. Explain with your own words the definition of Gross Domestic Product. 2. How does the growth rate of real GDP contribute to an improved standard of living? 3. Use the following data to answer the question. The table lists some macroeconomic data for the United States in 2008. Item Billions of dollars Wages paid to labor 8,000Consumption expenditure 10,000Net operating surplus 3,200Investment 2,000Government expenditure 2,800Net exports –700Depreciation 1,800 3a) Calculate U.S. GDP in 2008.
2. Activities included (and not included) in the calculation of GDP The gross domestic product (GDP) of the United States is defined as the all in a given period of time. Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2020. 2020 GDP Included Excluded Scenario An accountant starts a client's 2020 tax return on April 14, 2021, finishing it just before midnight on April 15, 2021. Treetopplers, a U.S. lumber company, produces wood at a plant in Oregon on September 25, 2020. It sells the wood to Buildit and Partners, a developer, for use in the production of a new house that will be built in the United States in 2020. (Note: Focus exclusively on whether production of the wood increases GDP directly, and ignore the effect of production of the new house on GDP.) Fastlane, a Japanese automobile company, produces a sedan at a plant in Indiana on December 14, 2020. A family buys the sedan on…
38)The following data are for a hypothetical economy in billion. What is GDP? Consumption Expenditure, C $900 Government Purchases, G $140 Net Taxes, T $200 Transfer Payments $100 Gross private Domestic Investment, I $60 Corporate Profits $100 Wages $800 Exports $100 Imports $200 Select one: a. 1220 b. 1200 c. 1000 d. 1100 e. 900
5. Given the following income data, please answer the questions below. Real GDP Consumption Ig Government Exports $5000 $12000 $7000 $7000 $5000 $12000 $5000 $12000 $5000 $12000 $7000 $7000 $5000 $12000 $7000 $100000 $116000 $140000 $148000 $180000 $180000 $220000 $212000 $260000 $244000 Imports $16000 $16000 $16000 $16000 $16000 a. Solve for net exports in each row. b. Solve for aggregate expenditures (AE) in each row. c. State the value for the equilibrium GDP. d. If imports were to increase by $16000 so they are now equal to $32000, solve for net exports again. e. With this new export value, solve for aggregate expenditures in each row. f. State the value for the new equilibrium GDP. g. Solve for the multiplier (you can solve for either the actual or simple multiplier).
2. Consider the following table showing the breakdown of GDP (in billions) for China. GDP Category Amount (in billions) Consumption 1700 Investment 700 Government 100 Expenditure Еxports 50 Imports 40 Using the expenditure approach, calculate GDP for China.
C and D

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