3. (Multiple Choice) If Ricardian Equivalence holds, what variable changes between the two equilibrium? a. The interest rate b. Consumption allocations c. Government expenditures d. Household savings e. Wages (assuming there is production)
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- 16- Which one of these will be deducted from gross output to determine the net output? a. Intermediate consumption b. Private income c. Factor income from abroad d. Total government spending7- The__________refers to the sum of all current incomes received by the individuals or households from all sources within the domestic territory of a country during an accounting year. a. National income b. Private income c. Personal income d. Passive income5- Which of these is true about GDP and equality? a. Equality is guaranteed in countries with high GDP b. Lower GDP means more inequality c. There is no clear relationship between GDP and equality d. Higher GDP means more inequality
- 11-The selling price of a product in Oman is higher than the price in Dubai although both products are having the same nature. Customers are buying the product from Dubai due to the price differences. What will be the effect of the customers buying the products from Dubai? (1) Due to this, appreciation in the value AED (United Arab Emirates Dirham) relative to OMR, (2) Due to this, depreciate in the value AED (United Arab Emirates Dirham) relative to OMR, (3) Product sold in Oman market will decrease and the retail price will go down, (4) Product sold in Oman market will decrease and the retail price will go up, (5) The demand for the product and prices will increase in Dubai a. (2) and (3) only b. (1), (2), (3), (4) and (5) c. (1) and (2) only d. (1), (3) and (5) only10) Suppose net taxes are $50 billion. Government spending is $125 billion. Investment is $50 billion and consumption is $100 billion. What is national savings? A) 50 billion B) -50 billion C) 75 billion D) -75 billion.13 Which national income estimation method needs information such as indirect taxes, depreciation and intermediate consumption? a. Net output b. Income c. Expenditure d. Factor
- 27- : “The document showing the income and expenses of the state together is called X.” In his statement, which of the following is most appropriate for X? a) Budget B) national income NS) national income per capita D) Marginal revenue TO) purchasing power parity7) Assume that a tire company sells 4 tires to an automobile company for $400, anothercompany sells a compact disc player for $500, and the automobile company puts all of theseitems in or on a car that it sells for $20,000. In this case, how much GDP has been generated?a. $20,000.b. $20,000 less the automobile company’s profit on the car.c. $20,900.d. $20,900 less the profits of all three companies on the items that they sold.13- How to calculate GDP with income approach? a) Wage+annuity+interest+depreciation+indirect taxes B) wage NS) Wage+annuity+interest+depreciation D) Fee TO) Wage+rent
- 11- Earnings such as wages, interests and dividends by residents who are living in other countries are called _____________. a. Domestic Output b. Factor income from abroad c. Price level d. Domestic productACTIVITY 4: Assessment Assume that a country has a closed economy that has only three goods/services. That is, there is no trade with other countries, so the economy has consumption, investment, and government spending, but no net exports. Each year, the economy produces three haircuts that cost $10 each two factory machines that cost $100 each one highway repair that costs $500 1a. What is total GDP for this economy? 1b. What percent of GDP is consumption? 1c. What percent of GDP is investment? 1d. What percent of GDP is government spending?…1 a)What is the value added definition of GDP? What is meant by value added? b) Suppose that in a given year, a company spends € 400 million on intermediate goods, €800 million on wages of employees with no other expenses and makes total sales worth of € 1600 million. What is the value added of this company? c) The government wants to increase absolute savings and successfully incentivizes the people to save more (saving rate goes up). Show is a graph, what happens to equilibrium output. How could increase in savings lead to a paradox. 2.) a) What are the elements within autonomous spending? State the formula for the multiplier b)In the graph below, draw the demand function (Z) including autonomous expenditure. Label the area representing autonomous spending. Add the value of equilibrium output that you calculated in part c. ( images) c)Suppose the following characteristics of an economy: C = 150 + 0.4 YD , I = 270, G = 100, T = 50 Calculate the equilibrium output and mark it…
