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- Mexico trades with the United States. Explain briefly the effect ofeach of the following events on the growth rate of real GDP andaggregate demand in Mexico.a. The United States goes into a recession.b. The price level in Mexico rises.c. Mexico increases the quantity of money.Consider the following table showing the breakdown of GDP (in billions) for China. GDP Category Amount (in billions) Wages and Salaries 1000Consumption 1700Investment 700Depreciation 50Government Expenditure100Taxes 300Exports 50Imports 40Income receipts from rest of the world10Income payment to rest of the world50 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?Use the following information to answer questions 5 through 15: The tables below show data on prices and quantities of Oranges and Shoes produced in China. Data for 2014Price of Oranges Quantity of Oranges Price of Shoes Quantity of Shoes0.7 200 10 270Data for 2015Price of Oranges Quantity of Oranges Price of Shoes Quantity of Shoes0.9 150 14 250Data for 2016Price of Oranges Quantity of Oranges Price of Shoes Quantity of Shoes1.4 300 15 3305. Given this data, what is the Nominal GDP in 2014?6. What is the Nominal GDP in…According to the East Asia and Pasific Economic update published by the World Bank in April2015, the following factors have affected China’s real GDP in 2015.• Global economic recovery supports a moderate increase in China’s exports.• China benefits from a fall in the world price of oil• Chinese government to cut excess capacity in heavy industry• U.S firms to relocate their labor-intensive manufacturing industries to low-cost acountries. 1. How each of the above factors changes short-run aggregate supply, long run aggregate supply, aggregate demand, or some combination of them.
- 1. According to the BEA, in the second quarter of 2012 personal consumption expenditures grew by 1.7 percent, gross private domestic investment grew by 3.0 percent, government expenditure on goods and services decreased by -0.9 percent, imports grew by 2.9%, and exports grew by 6.0%. Given these data, it is most likely that A) GDP growth was positive in the 2nd quarter. B) GDP growth was negative in the 2nd quarter. C) the economy hit a business cycle peak. D) the economy hit a business cycle trough. 2. In the national income accounts, government expenditure on goods and services exclude A) transfer payments. B) state and local government purchases. C) local government purchases but include state government purchases. D) spending on national defense. 3. Transfer payments A) are included in the government expenditure category in gross domestic product. B) refer to all payments made to households by governments. C) refer to payments made by the government that are not made to…Q. 4 The Services sector has been steadily rising in relative importance in GDP of the United States, as well as elsewhere around the world. Since "services" have been identified as "non-tradable" (e.g., it is difficult to export haircuts), it may be argued that this trend will likely slow the rapid growth in international trade. Discuss.In the tiny country of Tuvalu the economy is sustained by the production of small fishing boats made from local materials, tuna, and copra (from coconuts). Last year Tuvalu produced 800 boats at a cost of $2,000 each but only 500 were sold due to recession at a price of $3,200 each. They produced $5 million worth of copra from their coconuts and consumed $2 million of it locally. The rest was used in the production of coconut oil cream which was exported for a value of $10 million. Based on this information, what was Tuvalu’s GDP for last year? The GNP of a country is $200 billion, receipts of factor income from the rest of the world are $10 billion, payments of factor income to the rest of the world are $30 billion, and depreciation is $25 billion. What is the GDP and the Net National Product? Schneider’s Bicycles produced $860,000 worth of custom-made of custom-made bicycles last year and paid $45,000 in taxes. Schneider used $315,000 in parts to assemble the…
- Explain briefly what will happen to the performance of companies in the light of fears that the global economymight get into a recession:25- Which of the following statements is true in a situation where labor productivity increases in an economy? a) aggregate supply decreases B) aggregate supply shifts to the right NS) aggregate supply shifts to the left D) aggregate demand shifts to the right TO) aggregate demand shifts to the leftSuppose an economy that produces and consumes apples, bread, and toy-cars. In the following table are data for two different years. 2019 2020 Good Quantity Price Quantity Price Apples 50 Rs.50 60 Rs.60 Bread 200 Rs. 20 180 Rs.25 Cars 25 Rs. 100 30 Rs.140 a. Using 2019 as the base year, compute the following statistics for 2019 and 2020 in the table given below: Statistics 2018 2019 GROSS DOMESTIC PRODUCT Nominal GDP Real GDP GROWTH RATE Growth Rate of Nominal GDP Growth Rate of Real GDP PRICE INDICES GDP deflator Inflation rate using GDP deflator - CPI (a fixed-weight price index) Inflation rate using CPI b. How much did the cost of living rise between 2018 and 2019? Compare the answers given by GDP deflator and CPI. Explain the difference. c. Explain which price index (GDP deflator or CPI) should be used to adjust the salaries, budget or spending to counterbalance the changes in the cost of living? Why?
- According to the East Asia and Pasific Economic update published by the World Bank in April2015, the following factors have affected China’s real GDP in 2015.• Global economic recovery supports a moderate increase in China’s exports.• China benefits from a fall in the world price of oil• Chinese government to cut excess capacity in heavy industry• U.S firms to relocate their labor-intensive manufacturing industries to low-cost acountries.1. Explain the combined effects of these factors on China’s real GDP and the price level,starting from a position of long-run equilibrium.Using ideas behind the specific model, intuitively explain how gains from trade for the overall economy do not necessarily translate into gains for every group within the economy. In the model, what are definite winners and losers. For whom are the gains unclear? 2. Briefly explain why the specific factors model is often considered a ‘short-run’ model. Give an example of a situation where it may also be valid for the ‘long-run’. 3. Briefly and intuitively explain the mechanisms and main results of the Heckscher-Ohlin Model. 4. In the context of the Heckscher-Ohlin Model, briefly explain Leontief’s Paradox and give examples of how the model can be reconciled with his finding. 5. Why is the bilateral trade balance not necessarily a good measure of the trade relationship between two countries? 6. Consider the (‘long run’) effects of inward labor migration in the Heckscher- Ohlin Model. Assume that the country trades and the relative price of two goods X and Y stays constant. Assume X is…Consider the following table showing the breakdown of GDP (in billions) for China. GDP Category Amount (in billions) Wages and Salaries 1000 Consumption 1700 Investment 700 Depreciation 50 Government Expenditure 100 Taxes 300 Exports 50 Imports 40 Income receipts from rest of the world 10 Income payment to rest of the world 50 1. What are net exports for China? 2. 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?