Question 1: Year Total GDP (Million Population QAR) (Million) Population Growth Rate (%) GDP Growth GDP per Rate (%) Capita (Million QAR) 2014 2.459 620,000 2015 2.565 649,000 2016 2.654 669,000 2017 2.754 659,000 Based on the data above, calculate the following: 1. Population Growth Rate? 2. GDP Growth Rate? 3. GDP per capita? 4. Growth Rate of GDP per Capita? Compare the population growth rate with the GDP growth rate for each year from 2015 to 2017, and explain the relationship with the growth rate of GDP per capita in each year. Question 2: Suppose individuals in an economy deposit a total of $250 million in cash in commercial banks but prefer to keep $50 million in cash (coins and paper money) at home. Given that the total reserves in commercial banks are $30 million and the reserve requirement is 10%, calculate the following: 1. Required Reserves. 2. Excess Reserves. 3. Simple Deposit Multiplier. 4. Bank Deposits. 5. The M1 Money Supply. Question 3: If some individuals decide to withdraw a total of $1 million from their bank deposits, which total $20 million, to keep as cash at home, with a reserve requirement of 10%: 1. Calculate the M1 money supply after the withdrawal. 2. What is the change in the money supply after the withdrawal? Assume that after the withdrawal, individuals receive a total of $2 million as bond interest payments from the central bank, and they decide to deposit the entire amount back into their commercial banks. 3. Calculate the new money supply. L
Question 1: Year Total GDP (Million Population QAR) (Million) Population Growth Rate (%) GDP Growth GDP per Rate (%) Capita (Million QAR) 2014 2.459 620,000 2015 2.565 649,000 2016 2.654 669,000 2017 2.754 659,000 Based on the data above, calculate the following: 1. Population Growth Rate? 2. GDP Growth Rate? 3. GDP per capita? 4. Growth Rate of GDP per Capita? Compare the population growth rate with the GDP growth rate for each year from 2015 to 2017, and explain the relationship with the growth rate of GDP per capita in each year. Question 2: Suppose individuals in an economy deposit a total of $250 million in cash in commercial banks but prefer to keep $50 million in cash (coins and paper money) at home. Given that the total reserves in commercial banks are $30 million and the reserve requirement is 10%, calculate the following: 1. Required Reserves. 2. Excess Reserves. 3. Simple Deposit Multiplier. 4. Bank Deposits. 5. The M1 Money Supply. Question 3: If some individuals decide to withdraw a total of $1 million from their bank deposits, which total $20 million, to keep as cash at home, with a reserve requirement of 10%: 1. Calculate the M1 money supply after the withdrawal. 2. What is the change in the money supply after the withdrawal? Assume that after the withdrawal, individuals receive a total of $2 million as bond interest payments from the central bank, and they decide to deposit the entire amount back into their commercial banks. 3. Calculate the new money supply. L
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:Question 1:
Year
Total
GDP (Million
Population
QAR)
(Million)
Population
Growth Rate
(%)
GDP Growth GDP per
Rate (%)
Capita
(Million
QAR)
2014
2.459
620,000
2015
2.565
649,000
2016
2.654
669,000
2017
2.754
659,000
Based on the data above, calculate the following:
1. Population Growth Rate?
2. GDP Growth Rate?
3. GDP per capita?
4. Growth Rate of GDP per Capita?
Compare the population growth rate with the GDP growth rate for each year from 2015
to 2017, and explain the relationship with the growth rate of GDP per capita in each year.
Question 2:
Suppose individuals in an economy deposit a total of $250 million in cash in commercial
banks but prefer to keep $50 million in cash (coins and paper money) at home.
Given that the total reserves in commercial banks are $30 million and the reserve
requirement is 10%, calculate the following:
1. Required Reserves.
2. Excess Reserves.
3. Simple Deposit Multiplier.
4. Bank Deposits.
5. The M1 Money Supply.
Question 3:
If some individuals decide to withdraw a total of $1 million from their bank deposits,
which total $20 million, to keep as cash at home, with a reserve requirement of 10%:
1. Calculate the M1 money supply after the withdrawal.
2. What is the change in the money supply after the withdrawal?
Assume that after the withdrawal, individuals receive a total of $2 million as bond
interest payments from the central bank, and they decide to deposit the entire amount
back into their commercial banks.
3. Calculate the new money supply.
L
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