You have been employed as the chief economist for the economy UWI Land. The head statistician has provided you with the following information:
Compensation of Employees 900 | Consumption of goods 850 |
Corporate profits 400 | Rent Income 125 |
Factor income paid to the world 325 | Consumption of services 475 |
Factor Income received from the world 170 | Residential investments 350 |
Indirect taxes 775 | Non-residential investments 525 |
Subsidies 125 | Government Expenditure 925 |
Imports 700 | |
Net interest 75 | Exports 300 |
Proprietors income 300 |
Calculate UWI Land’s GDP using (1) the Income and (2) the Expenditure Approach
Question 2 (Activity 7.1)
Suppose production and prices of food and clothing (the only two goods produced in this economy) in 2006 and 2007 are as follows: (base year = 2006)
Year | Quantity of Food | Price of Food | Quantity of Clothing | Price of Clothing |
2006 | 20 | $15 | 15 | $5 |
2007 | 60 | $18 | 30 | $6 |
Calculate:
(i) nominal and real GDP in 2006 and 2007,
(ii) the GDP deflator
(iii) the growth rate in real output.
Question 3
(i) Calculate the value added at each stage of production
(ii) Calculate the contribution to GDP from the good
Question 4
Classify each of the following as a movement along or a shift of the production function and provide a justification for your choice.
(i) An increase in the number of machines used in production
(ii) An increase in the population growth rate
(iii) A new technological innovation
(iv) The government invests in a new entrepreneurship training program
(v) The government implements major reforms to make it easier to transact business
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![MACROECONOMICS FOR TODAY](https://www.bartleby.com/isbn_cover_images/9781337613057/9781337613057_smallCoverImage.gif)
![Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613040/9781337613040_smallCoverImage.gif)
![Microeconomics: Principles & Policy](https://www.bartleby.com/isbn_cover_images/9781337794992/9781337794992_smallCoverImage.jpg)
![MACROECONOMICS FOR TODAY](https://www.bartleby.com/isbn_cover_images/9781337613057/9781337613057_smallCoverImage.gif)
![Economics For Today](https://www.bartleby.com/isbn_cover_images/9781337613040/9781337613040_smallCoverImage.gif)
![Microeconomics: Principles & Policy](https://www.bartleby.com/isbn_cover_images/9781337794992/9781337794992_smallCoverImage.jpg)
![Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
![Microeconomics](https://www.bartleby.com/isbn_cover_images/9781337617406/9781337617406_smallCoverImage.gif)
![Exploring Economics](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)