9. Determine whether the following statement is correct or wrong:(a) "In 1933 net private domestic investment was minus $6 billion. This means that in that particularyear the economy produced no capital goods at all." (Correct, Incorrect ).(b) “Though net investment can be positive, negative, or zero, it is quite impossible for grossinvestment to be less than zero." (Correct, Incorrect ).

GDP refers to the value of goods and services produced in an economy over a given period of time.…

Answered: 9. Determine whether the following…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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GDP in an economy is $23,600 billion. Consumer expenditures are $18,000 billion, corporate profits are 600 billion, government purchases are $6,000 billion, and gross private domestic investment is $300 billion, stock purchases are $500 billion. What is the value of the net exports? O+$400 billion O-$700 billion O-$1.800 billion O-$300 billion O+$500 billion
6) Use the figure below to answer this question. Interest Rate (%) 12 10 Loanable Funds (in billions of Pounds) [Page 6 of 9] [ECO If the interest rate is 8% households and firms will want to borrow: a) £3 billion b) £2 billion c) £4 billion d) £1 billion 2.
You Answered Suppose that the economy is made up of a single firm, which pays $300rin interest payments, pays $300 in its labour costs, and pays $2,000 in rental costs for its building. The rest of its revenues are paid out to the owners of this firm. Correct Answer This firm also produces $10,000 of its final product, selling $7,000 to domestic consumers, keeping $2,000 to replenish its inventories, and selling the rest abroad. In this little economy, using the Income Approach, what is the total amount of Business Profits? Note: Round your answers to two decimal places. 8,700 9.400 margin of error +/-0.1
3. Categories of expenditures Dmitri and Frances Doherty live in Conshohocken, PA. Their son, Jake, 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 (1), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction Dmitri's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China. The Pennsylvania Department of Transportation, a state administration, fixes potholes along PA highway: 23, which feeds into the center of Conshohocken, Frances gets a new video camera made in the United States. Dmitri buys a sweater made in Guatemala. Jake buys a new set of tools to use in his plumbing business. с 00 I O O G O X 0 M O O 0 000 00 000 000
c) The table below contains information about the national income data of a country. RM billion 40 Items Capital consumption Government purchases Subsidies Net exports Indirect taxes Gross private domestic investment Net factor income from abroad Personal consumption expenditures 1,450 70 - 280 160 2,200 - 340 3,100 Using the above table, calculate the Gross Domestic Product at market price (GDPMP), Gross National Product at market price (GNPMP), Gross National Product at factor cost (GNPFC), and national income.
2. The following information has been extracted from National income accounts data of a certain country; Amount (Billion) Particulars Personal consumption expenditure Transfer Payment Rent on land Capital Consumption Allowance Social Security Contribution Interest on Capital Proprietor's income (Profits) Net exports Dividends 245 12 14 27 20 13 31 3 16 221 Compensation to employees (Wages) Indirect taxes 18 Undistributed corporate profits 21 Personal taxes 26 Corporate income taxes Corporate profits Government purchases of goods and services Net private domestic investments Personal savings 19 56 72 33 16 Required: (i) Net National product (ii) National income (iii) Personal ircome (iv) Disposable Income (v) Per capital Income
3. Categories of expenditures Shen and Valerie Ferrari live in Swarthmore, PA. Valerie's father, Antonio, lives in Sweden. 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 Shen's employer upgrades all of its computer systems using U.S.-made parts. Valerie gets a new video camera made in the United States. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. Valerie's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. Shen buys a bottle of Italian wine. OOOoo 0 I 00000 G 00 000 X 00000 M OC 0 0 0 0
20. Which of the following represents the measurement of GDP as the sum of consumption expenditures, investment, government purchases of goods and services, and net exports? a.Wealth approach b.Income approach c.Expenditure approach d.Saving approach
d. What is the value of the multiplier? e. If planned investment spending falls to $200 billion, what will be the new Y*? f. If autonomous consumer spending rises to $200 bil- lion, what will be the new Y*?
4. According to the following figure, what is the GDP? Please show how you computed it. Assume this is a closed economy. Does the "magic* equation hold? Show your work. Figure 2-2 Income (Y = ?) Transfer Payments = $300,000 Households Taxes = $300,000 Capital Market Private Savings = $900,000 Government Government Deficit = $300,000 Business Firms Private Investment = $600,000 Gov't Purchase of G&S = $300,000 Consumption Expenditures = $2,400,000
Table 11-6 Government Real GDP Consumption Investment Purchases 1 Net Exports $1,000 $1,000 $100 $150 -$50 2 3 2,000 1,900 100 150 -50 3,000 2,800 100 150 -50 4 4,000 3,700 100 150 -50 Using the table above, answer the following question. The numbers in the table are in billions of dollars. 13) Refer to Table 11-6. What is the value of MPC? A) 0.2 B) 0.5 C) 0.75 D0.9 E) None of the above
5. The following data (in millions of dollars) expresses all the relevant information for the agents in a given economy: Consumption 300 Wages and Salaries 275 Net Interest and Rents 40 Government Expenditures on Goods and Services 125 Indirect Taxes Minus Subsidies 60 Imports 100 Exports 150 Gross Investment 90 Depreciation 50 Corporate Profits 75 Proprietor's Income 60 a) Determine the gross domestic product for this economy. b) Determine the national income for this economy. c) Determine the net factor income from abroad for this economy. What is the meaning of this value?

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