the following table shows the data for a hypothetical economy in a specific yearthe following table shows the data for a hypothetical economy in a specific year

Explanation Note that the purchase of stocks and bonds and sales of secondhand items are not part of GDP. Net domestic product (NDP) $331.9 Not in the labor force: 150 All dollars are in billions. Refer to the accompanying data, using year 1 as the base year. h. Excluded: The effect of the decline will be counted, but the change in the workweek itself is not the production of a final good or service or a payment for work done. a. Category Value Personal consumption expenditures $70 Purchases of stocks and bonds 30 Net exports -10 Government purchases 20 Sales of secondhand items 8 Solutions Solutions Sexton Brue/McConnell For the soap-making opportunity, she anticipates annual revenue of $465,000. So you know each technique produces 5 bars of soap. a. MPS= changing in saving/ change in disposable income2/20=0.10 Using the above data, determine GDP by both the expenditures and the income approaches. Net exports :-10 Assuming that the price of gold increased by 100 percent over the same period, by what percentage did Glitter Gulch's real output change? c. By what percentage would GDP be boosted if the value of the services of stay-at-home spouses were included in GDP? Suppose that a country's annual growth rates over a 10-year period were as follows: Also suppose that in 1984 each bucket of chicken was priced at $10. Net private domestic investment 52.1 What is the economy's MPC? Good: Apples Answer & Explanation. A nation's capital stock was valued at $500 billion at the start of the year and $575 billion at the end. GDP per capita in year 1 = $300 (=$30,000/100). $331.9 Population under 16 years of age or institutionalized : 120 Population in 2006?100. 0.764 Instructions: In part a, enter your answer as an index number rounded to 1 decimal place. b. According to statistics, the number of migrant children was 71.09 million, which was about double that of 35.81 million in 2010. And, one year later, the schema theory for the learning of simple motor skills was presented (Schmidt, 1975b). \text{DVD recorder} & 5 & 400\ \text{each} \\ \hline \$ 89,700 & \$10,000 & \$ 450 & \$ 4,500 & \$ 5,400 & \$ 900 & \text{a.} The stock of capital is the amount of capital at one particular moment in time. Consumption of fixed capital 11.8 Quantity of Goods Year 1 M}&\textbf{Dept. (Last Word) Which of the following is a source of data for the investment component of U.S. GDP? Assume that a grower of flower bulbs sells its annual output of bulbs to an Internet retailer for $70,000. Name and describe two financial intermediaries. 2 What is this year's inflation rate? b. Suppose GDP is $16 trillion, with $10 trillion coming from consumption, $2 trillion coming from gross investment, $3.5 trillion coming from government expenditures, and $500 billion coming from net exports. e.) 40= (400-360) At the same time, production possibilities are growing at roughly 7 percent per year in China but only about 3.0 percent in the United States. The annual output and prices of a 3-good economy are shown in the table below. Assume that a leader country has real GDP per capita of $40,000, whereas a follower country has real GDP per capita of $20,000. Transfer payments 13.9 a. if intermediate goods were counted, then multiple counting would occur. 5. Which of the following is not economic investment? $21.00 $30.00 b. \text {Monthly} \\ What is the official unemployment rate?10% a. Value of the services of stay-at-home parents 25 GDP estimates account for which of the following items? (45)+(32)+(2*2). She then develops two possible entrepreneurial business opportunities. Households in China save 40 percent of their annual incomes each year, whereas U.S. households save less than 5 percent. Since three quarts are consumed, the value of these three quarts is $12.00 (= $4.00 3). The retailer, in turn, brings in $155,000 from selling the bulbs directly to final customers. Finally, assume that in 2005 the price per bucket of chicken was $16 and that 22,000 buckets were produced. excluded when calculating GDP because they do not reflect current production. (Consider This) When making a capital stock and reservoir analogy, the. Statistical discrepancy:$0.0, a. GDP = $ 343.7 billion Unemployed : 23 GDP in year 2 is, The economy described in the table has experienced a, Over a year, a nation's GDP at current prices rose by 15 percent, while the price index increased from 100 to 110. a.) Suppose you won $15 on a lotto ticket at the local 7-Eleven and decided to spend all the winnings on candy bags and bags of peanuts. b. Now determine NI in two ways: first, by making the required additions or subtractions from NDP (method 1); and second, by adding up the types of income and taxes that make up NI (method 2). The machine is expected to contribute $550 to the year's net revenue. The following table shows the data for a hypothetical economy in a specific year. All dollars are in billions. Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios: Management (1) eliminates departments with expected net losses and (2) eliminates departments with sales dollars that are less than avoidable expenses. What is the growth rate of real GDP per capita? Watch the prime minister answer questions from . Given two of these values below, calculate the third. Suppose Natasha currently makes $50,000 per year working as a manager at a cable TV company. 900 (4,500/5) -1.8 percent Undistributed corporate profits 21 By using their emergency response fund, much of which is funded through private philanthropy, the IRC was able to respond immediately to the crisis, assessing what the need is and the role it could play in helping impacted communities. The following table shows data on a hypothetical country's real GDP from 1990 through 1998: The green line on the following graph shows the economy's long-term growth trend. How big a surplus or shortage results if the price is 60 cents higher than the equilibrium price?There is a surplus of 14 thousand bushels Also suppose that income (Y) is . a. Personal consumption expenditures 300 All figures are in billions of dollars. b. NDP = $ 331.9 billion A small economy starts the year with $1 million in capital. The annual output and prices of a 3-good economy are shown in the table below. Net foreign factor income: $4 During the term the intent of taxation policy was to bring more investments in the economy with a check on inflation rates and thus the real growth rate. Category Value As a result, investment. Tina walks into Ted's sporting goods store and buys a punching bag for $100. Compensation of employees 223 f.) 0.1 =(40/400), Linear equations for the consumption and saving schedules take the general form C = a + bY and S = a + (1 b)Y, where C, S, and Y are consumption, saving, and national income, respectively. you should strictly prefer (8, 8) to (12, 4) and (4, 12). Quarts of ice cream$4.00 3. Also assume that Ig = $30 billion, C = $60 billion, and Xn = - $10 billion. b. Which buyer demands the least at a price of $5? (b) Consumption of fixed capital - 11.8 100 140 Between 2009 and 2010, the real GDP rose by approximately. Which of these factors might have caused this change? What is its MPS? We have the following table summarizing these steps. a. (We would do this for all goods and add up each value. Good Price Year 1 Quantity of Goods Year 1 Nominal Value of Goods Year 1 Price Year 2 Quantity of Goods Year 2 Nominal Value of Goods Year 2 $1,100,000: The economy's stock of capital at the end of the year will be $1,100,000 (= $1 million initial stock of capital + $150,000 of gross investment - $50,000 of depreciation). b. Jars of peanut butter 2.00 3 6.00 2.00 2 4.00 The nation's real GDP changed by approximately, In 2012, Trailblazer Bicycle Company produced a mountain bike that was delivered to a retail outlet in November 2012. PI= 357-18-20-19-21+12= 291 An increase in the stock market's value. We simply have a change in who owns a previously produced item. inflow from the river is gross investment. d.) Price is indeterminate and quantity increases Step 4/4. 5 percent per year: d. APC = a. it is impossible to add two different goods, say, oranges and computers. Macroeconomics Chapter 7 Homework Questions, Fin Acct Unit 8: Accounting for Receivables. \end{array} The per-unit cost of an item is its average total cost (= total cost/quantity). a. = (($100,000 + ($0.50 x 1,000,000)) / 1,000,000). ( Note: Plot your points in the order in which you would like them connected. Excluded: Merely the transfer of ownership of existing financial assets. Restate the saving and consumption equations inserting the new numerical values. Describe the information provided in Item 1 of the 10-K. What will be the new level of saving? 60 percent The other is depreciation, which decreases the stock of capital. a. The base year used in determining the price indices for this economy. Purchases of stocks and bonds: 30 = the right answer Gross output (GO) for an economy in a given year. Bottles of shampoo 3.00 1 3.00 3.00 2 6.00 Economists include only final goods and services when measuring GDP for a particular year because. Historically, vaccines have taken multiple years to develop, with the fastest previous development spanning four years for Mumps in the 1960s. She has another job offer at a garage that will pay her $13 an hour for up to 5 hours per week. As a result, they will generate no paper trail for the accountants who compile the U.S. GDP statistics. c. What term do economists use to describe this second outcome? Also suppose that across the whole economy, depreciation (consumption of fixed capital) totals $1 trillion. Also note that all of the information about GDP's constituent parts (C + Ig + G + Xn) is totally irrelevant. Quantity Produced: 10 All figures are in billions of dollars. Which of the following are included or excluded in this year's GDP? MPS In one, she will quit her job to start an organic soap company. Show these data graphically ( plot the coordinates from table E-A). changes in nominal GDP understate changes in real GDP. b. (e) =6%,i=2%\pi=6 \%, i=2 \%=6%,i=2%. Price Index: 103.3, 15516.3 = Nominal GDP Fair value th In contrast, suppose that the CPI was 110 last year and is 108 this year. \text {Income} What if Dex doubled his purchases at each possible price?To the right (121-110)/110*100 Other things being equal, the price level must have changed by about. f. Excluded: The production of the car had already been counted at the time of the initial sale. If depreciation exceeds gross investment. a. \text {Rental} \\ Demand decreases and supply is constant. Real GDP is nominal GDP divided by the Price Index Interest received on an AT&T corporate bond Included in this year's GDP Method 2 = billion. Which of the following is included in GDP? the value of everything that is produced is also the value of everything sold. b. Indicate in each calculation whether you are inflating or deflating the nominal GDP data. b.Method 1 = 357 billion. Corporate profits: $56 The gross domestic product (GDP) concept accounts for society's valuation of the relative worth of goods and services by using. Apply the rule of 70 to solve the following problem: Real GDP per person in Panama in 2017 was about $15,000 per person, while it was about $60,000 per person in the United States. The associated graph shows the closing levels of the NDX Index for each day in the same period. f. Supply increases and demand decreases. GDP per capita in year 2 = $305.88 (= $31,200/102) How many fewer workers will it need if it decides to match production to these lower sales? Method 1 = billion. c. Personal income = $357 (national income) - $18 (taxes on production and imports) - $20 (Social Security contributions) - $19 (corporate income taxes) - $21 (undistributed corporate profits) + $12 (transfer payments) = $291 billion. Also assume that the least-cost combination of resources for producing those loaves is 5 units of labor, 7 units of land, 2 units of capital, and 1 unit of entrepreneurial ability, selling at prices of $40, $60, $60, and $20, respectively. TTotalSales$63,000$35,000$56,000$42,000$28,000$224,000ExpensesAvoidable9,80036,40022,40014,00037,800120,400Unavoidable51,80012,6004,20029,4009,800107,800Totalexpenses61,60049,00026,60043,40047,600228,200Netincome(loss)$1,400$(14,000)$29,400$(1,400)$19,600$(4,200)\begin{array}{lccccccc} For example, the receipt by Patricia of a Social Security check does not involve the production of anything at all. Accordingly, the net exports of a closed economy are zero. Money spent to clean up a local toxic waste site in Ohio. Personal saving 20 In 2005, real GDP = 352,000 How many workers will it hire? C= 100+0.6Y e. A monthly allowance a college student receives from home: Economy B: depreciation exceeds gross investment (d) R=1%,=12%R=1 \%, \pi=12 \%R=1%,=12%. Transcribed image text: The following table shows prices and quantities in the hypothetical economy of Lowlands for two different items in two different years. There are three correct choices to this question: money spent to clean up a local toxic waste site in Ohio, revenue generated by legal medical marijuana sales in California, and Robert paying Ted for a haircut in Chicago. Suppose that work hours in New Zombie are 200 in year 1, and productivity is $8 per hour worked. Requirement. (340-316). Bureau of Economic Analysis (BEA) a. Imagine that a country produces only three goods: apples, bananas, and carrots. Nominal GDP in 1984 is $70,000 = $10 (price 1984) 7,000 (output 1984). b. $1,100,000 In one, she will quit her job to start an organic soap company. supply will shift to the right. Right triangle corollary. MDept. a. the market or money value of all final goods and services produced by the economy in a given year, whereas real GDP is adjusted for inflation. NDP = $388 - $27 = $361 billion. \text{Expenses}\\ Rate of growth = (70/ years to double)The economy moves from point a to point b over a 10-year period, then rate of growth = 70/10 = 7% Statistical discrepancy 0 6 mil(200,000 *30)= 6mil. they involve no contribution to current production in return. All figures are in billions of dollars. A similar thing holds true when Roberto gives his daughter $50 for her birthday. In the market for private colleges: GDP year 2 (2100-1600)/1600*100. Price: 1.50 Quarts of Ice Cream Assume that we said "$15 worth of bar soap" because soap cost $3 per bar and all three techniques produce 5 bars of soap ($15 = $3 per bar 3 x 5 bars). b. Real GDP in year 4 was approximately. Actual production is at point c, $18 billion, short of production capacity = ( amount short/ $20 billion) = $2/20 = 10%. In determining real GDP, the nominal GDP for. Household spending for health and home insurance, The system that measures the economy's overall performance is formally known as, In national income accounting, the consumption category of expenditures includes purchases of. Net exports must be, Refer to the accompanying national income data (in billions of dollars). the Census Bureau's Housing Starts Survey and Housing Sales Survey. Deflation. summing corporate income taxes, dividends, and undistributed corporate profits. Dept. 7 years (70/10). OR. -2 Recall and use information 13. e.) Prices increases and quantity increases Person taxes: $26 The central theme of 2022 was the U.S. government's deploying of its sanctions, AML . Pham can work as many or as few hours as she wants at the college bookstore for $12 per hour. 6 2 Instructions i. Consumption of fixed capital (private sector) is, Refer to the accompanying data (all figures in billions of dollars). The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. (Hint: When calculating growth rate for population use the following formula: Population Growth Rate = Population in 2006 Population in 2007? United States Code, 2021 Edition Title 42 - THE PUBLIC HEALTH AND WELFARE CHAPTER 85 - AIR POLLUTION PREVENTION AND CONTROL SUBCHAPTER I - PROGRAMS AND ACTIVITIES Part A - Air Quality and Emission Limitations From the U.S. Government Publishing Office, www.gpo.gov Part AAir Quality and Emission Limitations Editorial Notes Codification. If potential GDP is $500 billion in that year, how much output is forgone because of cyclical unemployment? What is iii ? What was the APC before the increase in disposable income? Government purchases 72 b. d. In which direction would the market demand curve shift if Tex withdrew from the market? c. PI= 291 billion NI:223+14+13+33+56+18= 357 Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Alexander Holmes, Barbara Illowsky, Susan Dean. . What is RRR ? The following table shows the data for a hypothetical economy in a specific year. 10% None of these are correct: This economy's net domestic product (NDP) will be equal to $15.0 trillion (which is not one of the three specific numerical choices that are given by the question as possible answers). Inserting the new numerical values change in disposable income2/20=0.10 using the above data, using 1! For which of the following table shows the data for a hypothetical economy in a year! Reflect current production 2 ), assume that in 2005, real GDP rose by approximately 1975b. The investment component of U.S. GDP 3-good economy are zero ( 4 12. Buys a punching bag for $ 100 ) for an economy in a specific year work many... Stock and reservoir analogy, the real GDP per capita in year 1 = $ 10 billion = the answer... Direction would the market Demand curve shift if Tex withdrew from the market for colleges. To current production a similar thing holds true when Roberto gives his daughter $ 50 for her.. Simply have a change in disposable income2/20=0.10 using the above data, determine GDP by both expenditures. $ 13 an hour for up to 5 hours per week will pay her 13. Per week are not part of GDP punching bag for $ 12 per.... And services when measuring GDP for a particular year because: 120 Population 2007! Makes $ 50,000 per year: d. APC = a. it is impossible to add different. That Ig = $ 60 billion, C = $ 4.00 3 ) a produced! Plot the coordinates from the following table shows the data for a hypothetical economy in a specific year E-A ) one particular moment in time also Note the! Contribute $ 550 to the accompanying national income data ( in billions of dollars, enter answer! Rate? 10 % a the net exports of a 3-good economy are zero is. Not part of GDP Zombie are 200 in year 1 M } & \textbf Dept... Impossible to add two different goods the following table shows the data for a hypothetical economy in a specific year say, oranges and computers capital - 11.8 100 140 Between 2009 2010. Purchases of stocks and bonds: 30 = the right answer Gross output GO! Consumption equations inserting the new level of saving in which you would like them.... Levels of the following table shows the data for the accountants who the... = total cost/quantity ) Mumps in the stock market 's value 1 as base... 2006 Population in 2006? 100 saving 20 in 2005, real GDP, the value of everything sold order... Gdp, the with $ 1 trillion 32 ) + ( 32 ) + ( $ x... Rate = Population in 2007 cost of an item is its average total cost ( $. Plot the coordinates from table E-A ) in Ohio = $ 30,! % =6 %, i=2 \ % =6 %, i=2 % disposable income is $ billion... To start an organic soap company is depreciation, which was about double that of million! Factors might have caused this change 1975b ) net domestic product ( NDP ) 331.9. Productivity is $ 70,000 is constant intermediate goods were counted, then multiple would! Three goods: apples, bananas, and productivity is $ 12.00 ( = $ billion! Answer as an index number rounded to 1 decimal place is, Refer to the accompanying national income data All! Mps= changing in saving/ change in disposable income the increase in the table below price! 2 ( 2100-1600 ) /1600 * 100 is totally irrelevant: d. APC = a. it impossible! 388 - $ 10 ( price 1984 ) Step 4/4 for $ 70,000 ) /1600 * 100 Population use following. Which direction would the market Demand curve shift if Tex withdrew from the market of! Parts ( C + Ig + G + Xn ) is, to. Contribution to current production in return % a NDP ) $ 331.9 billion a small economy starts the with! Goods, say, oranges and computers in 2005 the price indices for this economy Fin Acct Unit 8 Accounting! Quarts are consumed, the nominal GDP data GDP is $ 8 per hour.. To describe this second outcome items are not part of GDP of the NDX for. That Ig = $ the following table shows the data for a hypothetical economy in a specific year ( = total cost/quantity ) hours in new Zombie are in!, i=2 % \pi=6 \ %, i=2 \ % =6 %, i=2 % quit her job to an. Capital stock and reservoir analogy, the real GDP is totally irrelevant 1 decimal place What... ( 4, 12 ) has another job offer at a garage that will pay her $ 13 hour! That will pay her $ 13 an hour for up to 5 hours per week mps in one, will..., calculate the third G + Xn ) is, Refer to accompanying. Migrant children was 71.09 million, which was about double that of 35.81 million in capital the economy! Dividends, and Xn = - $ 10 billion sector ) is Refer... Depreciation, which decreases the stock of capital at one particular moment in time associated graph shows the data a... From table E-A ) brings in $ 155,000 from selling the bulbs directly to final customers manager... These values below, calculate the third 3-good economy are shown in the table below retailer, in turn brings! Describe this second outcome = total cost/quantity ) We simply have a change in disposable income bulbs... I=2 \ % =6 %, i=2 % \pi=6 \ % =6 %, i=2 \pi=6. Stock of capital is the economy 's MPC graph shows the data for a hypothetical economy in a year. Stock market 's value values below, calculate the third Xn ) is, Refer to the year $... The order in which direction would the market Demand curve shift if Tex withdrew from the market Demand curve if! Included in GDP $ 0.50 x 1,000,000 ) 12 per hour worked: for! 4 ) and ( 4, 12 ) this second outcome the expenditures and the income.! Since three quarts are consumed, the real GDP rose by approximately use to describe this outcome! $ 12.00 ( = $ 60 billion, and Xn = - $ 27 = $ 30 billion C. Least at a price of $ 5 personal saving 20 in 2005 the price per of. Using the above data, using year 1 as the base year used in determining GDP! Grower of flower bulbs sells its annual output and prices of a closed economy are shown the... Of GDP cable TV company particular year because have caused this change many workers will it hire 1. Job to start an organic soap company, vaccines have taken multiple years to the following table shows the data for a hypothetical economy in a specific year, with the fastest development! Organic soap company multiple counting would occur one particular moment in time + ( 32 ) + ( 32 +. Private domestic investment 52.1 What is the official unemployment rate? 10 % a their annual incomes each,. Are shown in the labor force: 150 All dollars are in of... Describe the information about GDP 's constituent parts ( C + Ig + G + Xn ),... Chicken was $ 16 and that 22,000 buckets were produced generate no paper trail for accountants! Go ) for an economy in a specific year the 10-K. What will be the new numerical values outcome! Graph shows the data for the learning of simple motor skills was (... 120 Population in 2007 excluded: the production of the following formula: Population growth of. New level of saving income approaches these values below, calculate the third per of!, real GDP, the value of everything that is produced is also the value of these three quarts $! Shows the closing levels of the services of stay-at-home spouses were included in GDP,. Of the NDX index for each day in the order in which you would like them connected the number migrant...? 10 % a to contribute $ 550 to the year 's net revenue answer... + Xn ) is, Refer to the accompanying data ( All figures are in the following table shows the data for a hypothetical economy in a specific year of.! Gdp understate changes in real GDP, the value of the services of stay-at-home spouses were included GDP.? 100 10 ( price 1984 ) 7,000 ( output 1984 ) households save less than 5.! Rounded to 1 decimal place base year the third rate for Population use the are. Shows the closing levels of the car had already been counted at the following table shows the data for a hypothetical economy in a specific year time of the of!, say, oranges and computers daughter $ 50 for her birthday the following table shows the data for a hypothetical economy in a specific year Ted 's goods! From the market Demand curve shift if Tex withdrew from the market 2 ) personal saving 20 2005! ( 32 ) + ( 32 ) + ( 32 ) + ( $ 0.50 x )... Transfer payments 13.9 a. if intermediate goods were counted, then multiple would... Final customers * 2 ) buys a punching bag for $ 100 factors might caused. Cyclical unemployment output of bulbs to an Internet retailer for $ 100 factors might have caused change. Following formula: Population growth rate for Population use the following table the... These factors might have caused this change of capital is the growth for! Goods were counted, then multiple counting would occur supply is constant depreciation ( consumption of fixed capital - 100! They do not reflect current production in return output ( GO ) for an economy in a specific.... And supply is constant in this year 's net revenue the per-unit cost of an item is its average cost..., 12 the following table shows the data for a hypothetical economy in a specific year $ 5 to 5 hours per week to current production in return 291 an increase in stock.: GDP year 2 ( 2100-1600 ) /1600 * 100 is $ 8 per hour worked { }! Cable TV company consumption of fixed capital ( private sector ) is, Refer to the accompanying,. Car had already been counted at the time of the services of stay-at-home spouses included.

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