Project #79093 - Economics

 

 

 

 

 

 

 

 

 

 

 

 

Brandi Oxendine

MBA 6008

Unit 5 Economic Problems

 

 

 

 

 

 

 

 

 

 

Chapter 25 Problem

4. To the right is a list of domestic output and national income figures for a certain year. All figures are in billions. The questions that follow ask you to determine the major national income measure by both the expenditures and the income approaches. The results you obtain with the different methods should be the same.

Personal Consumption expenditures

$245

Net Foreign factor income

4

Transfer payments

12

Rents

14

Consumption of fixed capital (depreciation)

27

Statistical discrepancy

8

Social Security contributions

20

Interest

13

Proprietors’ income

33

Net exports

33

Dividends

11

Compensation of employees

16

Taxes on production and imports

223

Undistributed corporate

18

Personal taxes

21

Corporate income taxes

26

Corporate profits

19

Government purchases

56

Net private domestic investment

33

Personal Saving

20

 

A. Using the above data, determine, GDP by both the expenditures   and the income approaches. Then determine NDP.

B. Now determine NI in two ways: first, by making the required additions or subtractions from NDP; and second, by adding up the types of income and taxes that make up NI.

C. Adjust NI from (part B) as required to obtain PI

D. Adjust PI (from part C) as required to obtain DI.

 

Chapter 27

4. If the CPI was 110 last year and is 121 this year, what is this year’s rate of inflation? In contrast, suppose that the CPI was 110 last year and is 108 this year. What is this year’s rate if inflation? What term do economics use to describe this second outcome?

Chapter 29

8. Assume that the consumptions schedule for a private open economy is such that consumption

C=50+0.8Y. Assume further that planned investment Ig and net exports Xn are independent of the level of real GDP and constant at Ig= 30 and Xn=10 Recall also that, in equilibrium, the real output produced (Y) is equal to aggregate expenditures: Y=C+Ig+Xn.

A.      Calculate the equilibrium level of income or real GDP for this economy.

B.      What happens to equilibrium Y if Ig changes to 10? What does this outcome reveal about the size of the multiplier?

 

 

Chapter 30

3a.  Suppose that the aggregate demand and aggregate supply schedules for a hypothetical economy are as shown in the following table:

Amount of Real DP Demanded GDP Demanded, Billions

Price Level

(Price Index)

Amount of real GDP Supplied, Billions

$100

300

$450

20

250

400

300

200

300

400

150

200

500

100

100

 

 

A.      Use the data above to graph the aggregate demand and aggregate supply curves. What are the equilibrium price level and the equilibrium level of real output in this hypothetical economy? Is the equilibrium real output also necessarily the full-employment real output?

Subject Business
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