32. Giving reason explain how should thefollowing be treated in estimatingGross Domestic Product at Market Price ?(i) Fees to a mechanic paid by a firm.(ii) Interest paid by an individual on a car loantaken from a bank.(iii) Expenditure on purchasing a car for use by afirm

GDP at market prices is the end result of resident producer units' production activity. It is…

Answered: 32. Giving reason explain how should…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 5CQQ

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The Consumer Price Index is subject to the substitution bias and me quality/new goods bias. Are the Producer Price index and the GDP deflator also subject to these biases? Why or why not?
Using the information below, what is the Gross Value Added at Market Price? Output Sold 800 Price per unit of output 20 Import Duty 400 Net change in stock -500 Intermediate Consumption 8000 a. 7900 b. 6500 c. 2100 d. 7500
7- 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 income
Discuss wether all firms in a country will welcome a change in people’s income.
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
21. A fall in the general price level of the country leads to _______________. a. Rise in the real income of the customers b. No change in the real income of the customers c. None of these d. Fall in the real income of the customers
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= 70
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 spending
b) An economy produces only steel and coal. These two commodities serve as intermediate inputs in each other’s production. 0.3 tonne of steel and 0.5 tonne of coal are needed to produce a tonne of steel. Similarly 0.2 tonne of steel and 0.4 tonne of coal are required to produce a tonne of coal. 3 and 6 labour days are required to produce a tonnes of coal and steel respectively. The economy needs 560 tonnes of coal and 120 tonnes of steel. Required (i) Calculate the gross output of the two commodities. (ii) Compute the total labour days required (iii) Distribute the output obtained in (i) among the various users.
National Income DeterminationThe following figures are from data on Good Island EconomyItems $mNet private investment 940Depreciation 56Compensation of employees 2 256Corporate taxes 416Personal taxes 756Personal Consumption expenditure 4 386Government purchases 3 182Indirect business taxes minus subsidies 482Payment of factor income to the rest of the world 95Corporate profits minus dividends 56Government transfer payments and interest 243Exports 855Receipts of factor income from abroad 186Imports of goods and services 385Social insurance payments 332 Required: Use the above information to answer the followingi.) Calculate for Good Island:a. Gross private investment b. Gross Domestic product c. Gross National Product d. Net National Product e. National income f. Personal Income g. Disposable Personal Income
The equation of demand is Q=10000-5p, supply is Q=-2000+10p Q represents the quantity of houses on the market and P the rental price. The equilibriumrental price equals 800 euros per month. if the government ubsidizing renting a house with 300 euro per month.What are the effects of each measure for both house owners and people renting ahouse? And what are the consequences for the government? Analyse the measuresgraphically and mathematically.
(J) Question 2 Given the following data, calculate Net Domestic Product (NDP) at market prices: Gross National Product at market prices=US\$ 85,000 Depreciation=US$3,000Net factor income from abroad = US\$ 2,000

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32. Giving reason explain how should the following be treated in estimating Gross Domestic Product at Market Price ? (i) Fees to a mechanic paid by a firm. (ii) Interest paid by an individual on a car loan taken from a bank. (iii) Expenditure on purchasing a car for use by a fırm