0StatsGood Year PriceCars. 2020 $10,000Tires 2020 $50@2WHomework Question 4: All Tired OutThe economy of Toyotonia produces two goods: cars and tires. The tires that are produced aresold directly to car manufacturing companies while the cars are sold directly to consumers. Eachnew car that is produced requires 5 new tires (4 tires for driving on and one spare tire). The pricesand quantities of goods purchased in Toyotonia are provided in the table below. For simplicity,assume the following: no other goods or services produced or consumed in the economy.S#3Ea) Calculate the value of inventory investment for 2020 and for 2022.b) Calculate Nominal GDP for 2020 and 2022.c) Calculate Real GDP for 2020 and 2022, using 2020 as the base year.d) Assume the tires were imported. Redo b) and c).e) Ignore d). Of the 100 cars produced in Toyotonia in 2022, suppose only 30 cars sold in 2022.The remaining 70 will be sold in 2023. Recalculate inventory investment, Nominal GDP andReal GDP for 2022 using this new information.$4Econ 102pRFQuantity Year Price10020222022 $60$10,000600do 5%TEcon 102pGOP^6TY*OH&7Quantity100400Abnormal Psych8J1(9K0)0P5@EEcon 201

Inventory Investment : Out of all the goods and services which are produced in an accounting year…

ts Econ 102p Good Year Price Cars 2020 $10,000 Tires 2020 $50 Econ 102p x O* Homework Question 4: All Tired Out The economy of Toyotonia produces two goods: cars and tires. The tires that are produced are sold directly to car manufacturing companies while the cars are sold directly to consumers. Each new car that is produced requires 5 new tires (4 tires for driving on and one spare tire). The prices and quantities of goods purchased in Toyotonia are provided in the table below. For simplicity, assume the following: no other goods or services produced or consumed in the economy. Quantity Year Price 100 2022 $10,000 600 2022 $60 Abnormal Psych Quantity 100 400 a) Calculate the value of inventory investment for 2020 and for 2022. b) Calculate Nominal GDP for 2020 and 2022. c) Calculate Real GDP for 2020 and 2022, using 2020 as the base year. J C Econ 20

ts Econ 102p Good Year Price Cars 2020 $10,000 Tires 2020 $50 Econ 102p x O* Homework Question 4: All Tired Out The economy of Toyotonia produces two goods: cars and tires. The tires that are produced are sold directly to car manufacturing companies while the cars are sold directly to consumers. Each new car that is produced requires 5 new tires (4 tires for driving on and one spare tire). The prices and quantities of goods purchased in Toyotonia are provided in the table below. For simplicity, assume the following: no other goods or services produced or consumed in the economy. Quantity Year Price 100 2022 $10,000 600 2022 $60 Abnormal Psych Quantity 100 400 a) Calculate the value of inventory investment for 2020 and for 2022. b) Calculate Nominal GDP for 2020 and 2022. c) Calculate Real GDP for 2020 and 2022, using 2020 as the base year. J C Econ 20

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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