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- 1. An economy is characterised by the following equations: C (Consumption) = 60 + 0.9Yd I (Investment) 10 G (Government expenditure) 10 T (Tax) X СЕхрorts) M (трorts) 20 10 + 0.05 Y %3D (a) What is the equilibrium income? (b) Calculate trade balance. (c) What is the value of foreign trade multiplier ?11.(a) Find an expression for the IS curve of the domestic economy. There is no need to show mathematical derivations. a. Y = (08)DD - (0.5) i b. Y = (12-0)DD - (1250) i 0 L * c. Y Y = (0.146 )DD - (0.840) i 5-)i + (² 5-) Y² B 0.8+0 0.8+0 0 0.5 d. Y = ( 1¹0 )DD − ( 145 )i + (14)Y* - 0 1+0 1+0 e. None of the above1 During the coronavirus epidemic last year, GDP contracted by approx. 6% at the same time exports contracted much more (collapse of tourism) during imports so instead. Reasons (all changes here refer to relative changes) that the contraction in GDP was much smaller than the deteriorating balance in foreign trade in goods and service was to: (1) Two of the others are correct. (2) Changes in inventories increased when exports were made that were not produced during the year. (3) Private consumption, C collapsed and this meant that GDP contracted less than balance of exports and imports. (4) The government assisted the economy and contributed to increasing GDP by reducing public consumption, G. (4) National expenditure did not decline as much as GDP, which offset much contraction in the balance of exports and imports.
- Table $Billions Depredation Receipts of factor income from the rest of the world Government purchases Imports Pay ments of factor income to the rest of the world Net private domestic investment Personal income taxes 40 30 100 50 50 200 120 Personal consumption expenditures Dividends 600 20 60 Exports Amount of national income not going to households 20 Refer to Table] The value for NNP in billions of dollars is Seleçt one: a. 890. b. 970 C. 910. d. 940.Problem 1 Given the following table: $Billions 40 Depreciation Receipts of factor income from the rest of the world Government purchases Imports Payments of factor income to the rest of the world Net private domestic investment Personal income taxes 30 100 50 50 200 120 Personal consumption expenditures Dividends 600 20 Exports Amount of national income not going to households 60 20 Calculate: 1- GDP 2- GNP 3- NNP 4- National Income 5- Personal Income 6- Disposable Incomeln a hypothetical country, consumption was $3100, exports were 5400, GDP was 55000, imports were 5500, and investment was 51400. What were this country's government purchases? a)$160 b)$1200 c) $500 d)$5000
- Assume there are only two producing sector Y & Z in an economy. Calculatea) Gross value added at market price by each sector b) National income from the followings:Items Amount in CroresNet factor income from abroad- 20Sales by Y= 1000Sales by Z= 2000Change in stock of Z= -200C Closingstock of Y= 50 Opening stock of Y= 100Consumption of fixed capital by Y & Z= 180Indirect taxes paid by Y & Z= 120Purchase of raw material by Y= 500Purchase of raw material by Z= 600Exports by Z= 703. Consider the following table showing the breakdown of GDP (in billions) for China. GDP Category Wages and Salaries Consumption Investment Depreciation Government Amount (in billions) 1000 1700 700 50 100 Expenditure Тахes 300 Еxports Imports Income receipts from rest of the world Income payment to rest 50 40 10 50 of the world What are net exports for China? 4. Suppose that GDP in Japan is 1030 and then grows to 1160 (all numbers in billions) What is the growth rate of GDP in Japan?(a) Consider a closed economy whose desired savings (Sd) and desired investment (Id) are given by the following expressions: CC₂ rd where r denotes the real interest rate. Find the equilibrium in the Goods market for this economy, and represent it in a graph. From now on, suppose there are two large Countries in the world, say Canada (Ca) and the United States (US). Ca (b) To start with, assume that both Countries are closed economies. Their desired consumption (Cd) and desired investment (I) are given by: Cus Its Sd Id = = = = 100+ 600r 170 - 400r 10+ cca (Yca Tca) - 100r 15 - 100r 40+ cus (Yus - Tus) - 200r = 230 - 200r Moreover, output (Y), taxes (T), public expenditure (G), and the marginal propensity to consume (c) are as follows:
- 4. Foreign payments to capital, labor, and land owned by domestic entities minus payments to factorservice imports equals: a. the difference between gross national income and gross domestic product. b. the difference between imports and exports. c. the difference between unilateral transfers and domestic income.d. income not subject to taxation such as capital gains, illegal earnings, or casual earningsQuestion - , unofficial financial If the country's GDP is $2300, private saving is $200, net exports are account is $300, net transfers are -$100, primary budget deficit is $450, then investment is equal to $100.2. Categorize each flow in the following table as either an injection into the circular flow or a leakage from the circular flow Flow Injections Leakage Saving (S) Net taxes (NT) Exports (X) Investment spending (I) Government purchases (G) Imports (IM).