a. With the data above, clearly show your steps including the economic variables involved and calculate: 1. Gross Domestic Product (by any approach of your choice). Interpret your estimated GDP value. 2. National Income (by any approach of your choice). Interpret your estimated national income value. 3. Personal Income. Interpret your estimated personal income value.
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- 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= 70PI= NI-retained corporate profits + net transfer payments - indirect tax National income: 19,786Less:Corporate profits with inventory valuation and capital consumptionadjustments -2,771Taxes on production and imports less subsidies -1,182Contributions for government social insurance, domestic -1,541Net interest and miscellaneous payments on assets -644Plus: Personal income receipts on assets 3,202Plus: Personal current transfer receipts 4,617 Personal income equals : ?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
- Federal Income Tax Per Capita Using datafrom 2010 and projected to 2018, the federalincome tax per capita is given by the functiony = f(x) = 486.48x + 3486.84, where x is thenumber of years after 2010 and y is in dollars. If thismodel remains valid, in what year will the federalincome tax per capita be $8351.64?A new factory in a small town has an annual payroll of $6 million. It is expected that 60% of this moneywill be spend on the town will by factory personnel. The people in the town who receive this money areexpected to spend 60% of what they receive in the town, and so on.(a) What is the total of all this spending (called the “total economic impact”) of the factory on the towneach year?(b) How much additional spending will be generated by a 10 million dollar tax rebate if 60% of allincome is spent?The following data relates to the economy of a country over a one-year period. K’B Subsidies ………………………………………… 1 000 Gross domestic fixed capital formation……………. 2 400 Exports of goods and services ……………………. 2 000 Government final consumption ……………………. 3 000 Property income from abroad …………………… 300 Imports of goods and services ……………………. 2 500 Value of physical decrease in stocks …………… 10 Consumer’s expenditure ……………………. 8 000 Capital consumption/Depreciation ………………… 1 500 Taxes on expenditure……………………………... 1 750 Property income paid abroad ……………………. 500 Required Calculate the following from the above data: (a) Gross domestic product at market prices (b) Gross domestic product at factor cost (c) Gross national product at factor cost (d) Net national product at factor cost
- Suppose the macroeconomic parameters are as follows in Turkey. Production: Y = A K1/3 L2/3 (A= 7 ) Factor supplies: K, L (K = 3000, and L= 1300) Government: 2200, Taxes: 2000 Consumer behavior C = 1000 + 0.6 (Y-T Investment behavior | = 3000 - 1000г Compute real interest rate in Turkey (Show the percentage value as numerical such as 15 for %15 or 0.15).Scenario 2Suppose the marginal product of capital is MPK=2-0.001K, the capital stock depreciates at 20% rate, the tax rate on revenues is 20% and price of capital is assumned to be 1. Furthermore, the economy has full-employment level of output of 5000, government purchases are 1000. Desired consumption is given by C^d=3000-2000r+0.1Y, where Y is output and r is expected real interest rate. Initial level of capital is 1000.Refer to Scenario 2. what is the expression for desired gross investment ? A) I^d=950-1250r B)I^d=950+1250r C)I^d=1750-1250r D)I^d=1950-1250r.Scenario 2Suppose the marginal product of capital is MPK=2-0.001K, the capital stock depreciates at 20% rate, the tax rate on revenues is 20% and price of capital is assumned to be 1. Furthermore, the economy has full-employment level of output of 5000, government purchases are 1000. Desired consumption is given by C^d=3000-2000r+0.1Y, where Y is output and r is expected real interest rate. Initial level of capital is 1000. Refer to Scenario 2. What is goods market clearing real interest rate? A)r=13.84 B)r=15% C)r=2% D)r=16%
- Consider an economy called Xanadu for which desired aggregate consumptiondepends on income, Y. and the real interest rate, r, according toCd =100+0.7Y - 200r.Xanadu's GDP is Y = 1000 and government spending on goods and services is G=180. Xanadu's desired future capital stock is given byK* = 140 - 100ucwhere luCdenotes the user-cost of capital. The price of capital is PK =2, thephysical depreciation rate is d =0.1 and the existing capital stock is K0= 50. Trapital stock between any period t and the following period t+1 evolves accordng toKt+1 = It+(1-d)Kt where It the level of investment. Assume throughout that net factor payments from abroad (NFP) is equal to zero.Suppose instead that Xanadu is a small open economy facing a world interest rate of 1%. It follows that Xanadu's current account position is equal toA) -16B) -51C) -6D) -8You are given the following information about an economy: $millionsGDP at Market Prices 1,669.4Imports 290.5Gross Domestic Capital Formation 48.7Income accruing to the Public Sector 39.0Retained Business Earnings 75.9Exports 273.4Subsidies 16.8Factor Payments from Abroad 10.0Capital Consumption Allowance…You are given the following information about an economy: $millionsGDP at Market Prices 1,669.4Imports 290.5Gross Domestic Capital Formation 48.7Income accruing to the Public Sector 39.0Retained Business Earnings 75.9Exports 273.4Subsidies 16.8Factor Payments from Abroad 10.0Capital Consumption Allowance…