Explain how national income is determined in a 3-Sector Economy ? Mode of submission: Hand-written and mail at doubt.cst@gmail.comQuestion. 1: What is macro economics? Explain how national income is determined in a 3-SectorEconomy?Question.2: Show with the help of iso-quants that a firm will be in equilibrium regarding use of afactor combination when marginal rate of technical substitution between factors is equal tothe ratio of factor pricesQuestion. 3: What will the effect on the iso cost line if the wage rate of labour falls keeping rent ofcapital unchanged. Also show the shift in iso-cost if the rent of the capital falls keeping wagerates of labour unchanged.Question. 4:"If government levies an additional tax on luxury items, the prices of these items willincrease. However this will cause demand to decrease and as a result the prices will fall backdown, perhaps even to their original levels." Do you agree with the statement. ExplainQuestion.5: What do you understand by economic stability ? Illustrate the role of monetary policyin maintaining economic stability in the country.

Economics is a branch of social science that investigates how economies produce and use goods and…

Answered: Explain how national income is…

Business

Economics

Explain how national income is determined in a 3-Sector Economy ?

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter8: Aggregate Demand And The Powerful Consumer

Section8.A: National Income Accounting

Problem 3TY

See similar textbooks

Related questions

Q: The variable Fraud/Not-Fraud would be considered a dummy variable in a regression a) True b) False

A: A regression analysis looks into the causal relationship between dependent and independent…

Q: What of the following can represent Gina's utility function? u(x, y) = x³ + y² u(x, y) = 4x + 3y…

A: Gina is consuming the two goods x and y with the preference as She likes 3 T-Rex's as much she…

Q: Consider the following balance sheet for Watchover Savings Incorporated (in millions): Assets…

A: Interest on loans and interest on deposits are the main sources of income and expenses for banks,…

Q: Personal income PI is Select one: a. All income received by households b. All income earned by…

A: Every household works to gain some monetary benefit that provides him/her some satisfaction level in…

Q: The monetary base of China increases if a) Cristiano Ronaldo buys Chinese public debt from Messi.…

A: A country's "monetary base" refers to the entire amount of its currency that is either in…

Q: A farmer can either invest in irrigation for their farm or not. There's a 30% chance that they will…

A: The game in an extensive form refers to the specification of a game in the study of game that allows…

Q: In determining real GDP economists adjust the nominal GDP by using the: Select one: a. consumer…

A: Introduction: Nominal GDP: Gross domestic product (GDP) that is calculated using current market…

Q: A firm is producing at the point of diminishing marginal product. It increases its use of labor.…

A: Diminishing Marginal product shows that with the additional input, the output derived is less. We…

Q: economic losses or profits and production either more or less than the amount at which costs are a…

A: Monopoly refers to the market where a single firm exists in the market. The single firm is price…

Q: An increase in productivity of a variable input will do which of the following at the current level…

A: The total product refers to the total amount of output produced with a certain amount of input…

Q: 4. Questions and Problems 4 This question relates to Fed policy tools and monetary policy in the…

A: Open market operation is used to change the money supply. When Fed sells the bonds , this means Fed…

Q: In the given question What will be the Net indirect taxes if the subsidies are 610 and Indirect…

A: An Subsidy is any monetary guide given by an administration to a maker or vender of a decent or…

Q: U=2x+2y where px/py=1/4 use indirect utility to express the expenditure funtion

A: Note: “Since you have posted multiple questions, we will provide the solution only to the first…

Q: Suppose that a production function of a firm is given by q = f(1) = 2√1. It depends only on labor,…

A: For a price taker firm, prices on which it sells its output and the price on which it buys the…

Q: Which one of the following statements describes a shortcoming of the Federal Reserve's monetary…

A: Main function of Federal reserve are Conducting monetary policy – The federal reserve aims to…

Q: Suppose the Bank of Canada increases the money supply. We can conclude that: A) GDP has been growing…

A: Monetary Policy: Monetary policy refers to the policy instruments with which the central bank of a…

Q: Describe the key assumptions that characterize a perfectly competitive market and explain the profit…

A: Perfectly competitive market refers to market in which there are many sellers that sell or deal in a…

Q: 12. What is the subgame-perfect outcome from a finitely repeated game? a. Iterated Elimination…

A: Nash equilibrium (NE) assists the players in achieving the best strategy in a non-cooperative…

Q: The following data give the yearly inflation rate and money supply growth rate (both measured in…

A: Regression analysis represents the relationship between dependent and independent variables. It…

Q: Interest Rate (percent) 14 #2086TNO 10+ 4+ I Money Market 1 1 20 40 60 I Ms1 % 140 100 120 160 Mp…

A: The proportion of deposits, commercial has to keep with themselves is known as RR(reserve ratio) .RR…

Q: The figure above shows a housing market with a rent (price) ceiling equal to $1500. With the rent…

A: Producer surplus is the discrepancy between a buyer's willingness to pay and the commodity's market…

Q: In the second paragraph of the June 30, 2004, FOMC statement, the committee affirmed that it…

A: The U.S. central bank implements its monetary policy through the Federal Open Market Committee…

Q: 5. To advertise or not to advertise Suppose that two firms, Hatte Latte and Bean Bruuer, are the…

A: A payoff matrix is a table that lists the various options available to game players. The payoff…

Q: Which of the following is an internal source of data for an MIS? Trade publications Accounting data…

A: In economics, MIS refers to the management information system, which is one of the tools used by…

Q: Please make introduction and background of the study only.

A: Introduction: De la Salle University Chemical Engineering students Antonio Tagorda and Samuel…

Q: According to the _____ model, everything else equal, countries with a larger population experience…

A: Since you have asked multiple questions, we are answering only the first question. To get solutions…

Q: How does health disparities affect the labor market and money market

A: Health disparities are the prevalence of inequities in the burden of disease, harm, abuse, as well…

Q: Match the following scenarios to whether they refer to an expansionary or contractionary monetary…

A: Monetary policy is used to control the money supply in the economy. There are two types of monetary…

Q: The consumers in the economy buys only two general types of products: Apples, and Bananas. Price…

A: CPI is the consumer price index. It is calculated as :- CPI = (Cost of basket in current year ÷…

Q: Below data shows the economies of Gotham and Metropolis. Gotham…

A: Inflation rate measures the rate at which price rises over time, which leads to fall in the…

Q: 2. Excess capacity Osato Chemicals Inc. had sales of $1,720,000 last year on fixed assets of…

A: Fixed asset turnover ratio is the ratio which calculate or measure the efficiency of the assets…

Q: ne practical limitation with Keynesian economics is the challenge of implementing active economic…

A: The numerous macroeconomic theories and models of how aggregate demand significantly affects…

Q: In the table below what is the average cost of the 20th unit of output? ( Selected answer will be…

A: Average cost is the cost of production per units. Total cost is the cost of production of all the…

Q: Should the USA support a global economy or a closed economy?

A: An open economy or a global economy is a type of economy that trades products, services and…

Q: explain why does the WTO need to separate Agreement on Agriculture?

A: The Committee on Agriculture oversees the application of the Agriculture Agreement and keeps track…

Q: Explain the concept of limited liability.

A: Introduction liability in business is an owner or a shareholder's duty in case a company becomes…

Q: A Romer economy starts at time t=0 with an initial capital stock of ideas equal to 5. The total…

A: Introduction: Romer economy: Romer created the endogenous growth theory, stressing that efforts by…

Q: The commercial banking system has excess reserves of $2,000. Then new loans of $20,000 are…

A: Reserve are the part of deposit that is kept out of deposit by the banks. Multiplier is given by…

Q: If Canada's economy moves into an expansionary phase of the business cycle, then: Group of answer…

A: In expansionary phase the Aggregate demand is at boom and the unemployment is at lowest point.…

Q: Describe the effect on the money supply if the Fed increases the discount rate

A: The discount rate is the interest rate at which the central bank lends money to the private banks.…

Q: 1. Find the value of autonomous spending. 2. What is the slope of the LM curve? 3. Find the value of…

A: The IS curve is defined by the equation mentioned below: Y= C + I + G Where Y is the real GDP C is…

Q: . Solving for dominant strategies and the Nash equilibrium Suppose Antonio and Trinity are playing a…

A: A dominant strategy is that strategy that is used by a player in every situation irrespective of the…

Q: Which of the following policies will shift the IS curve to the right a) An increase in the…

A: The IS curve depicts all income (Y) and real interest rate (r) pairings that result in an…

Q: E1 Kazakhstan is a “small” country that cannot affect world prices. Their demand for coffee is…

A: A closed economy is known for its trade situations when the nation is not involved in international…

Q: You see that an industry has only a few major firms. How could you best determine that this market…

A: Market structure is determined on the basis of a few factors such as the type of the product, the…

Q: What is the best example of an oligopolistic market? Question 4 options: Government monopoly…

A: A market structure known as an oligopoly has a small number of enterprises that are in fierce…

Q: A company with two different plants manufactures guitars and banjos. Its production costs for each…

A: The cost of production of a firm involves costs of labor, raw materials, and capital. Out of the…

Q: ++ MY Q of Workers 0 1 2 3 4 NSC Bakery specializes in making bread. It has fixed costs associated…

A: The marginal product of workers is equal to the increase in output when one more worker is added.…

Q: An oligopolist can price discriminate if it is able to prices on customers with elastic demand and…

A: Customers pay different prices for the same products or services under the pricing model called…

Q: Suppose the the demand for a product is given by Qd = 40 − 3P , and supply by Qs = 5 + 2P . (a) What…

A: A surplus level in the economy is the benefit that an individual receives from economic activity. A…

Question

Explain how national income is determined in a 3-Sector Economy ?

Definition Definition Monetary value of all goods and services produced in an economy during a financial year. National income also refers to the total income earned by the factors of production during a financial year.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Introduction

VIEW

Explanation

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Consider a macroeconomy where the current population is 800 thousand people. Gross domestic private investment is constant $2500 million while consumer expenditure is described by the equation: C = 580+ 0.8DI. The government is fairly active, with a total expenditure of $2000 million and net taxes of $2550 million. Further investigation of the macroeconomy reveals that imports are constant at $3000 million while exports are constant at $2500 million. Currently, the overall price level (GDP deflator) is 118 and the potential GDP level is $13.5 billion. What is the current equilibrium level of real GDP? (report your answer at 2 decimal places and in millions of dollars) 1. What is the current equilibrium level of real GDP 2. what is the current real GDP per capita? 3. what is the value gap?
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
Assume the following model of the expenditure sector: S=C+I+G+Nx TR=100 C=420+(4/5)YD I=160 G=180 Nx=-40 YD=Y+TR-TA TA=(1/6)Y Assume you increase both government purchases (G) and taxes (TA) by the same lump sum of deltaG=deltaTA=+300. Would this be sufficent to reach the full employment level of output at Y*=2700? Why or why not?
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) -8
How is interest rate calculated when using intertemporal consumption between two periods. Can a formula be provided, please? Subject area intertemporal consumption (microeconomics) For reference : Income 1 Income 2 Consumption 1 Consumption 2 (How is the interest rate calculated if given the figures for Income 1, Income 2, Consumption 1 and Consunpmtion 2 . Please explain
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
4. Assume the following model of the expenditure sector: AD=C+I+G+NX C = 420 + (4/5)YD YD=Y–TA+TR TA = (1/6)Y TRo = 100 Io = 160 Go = 180 NXo =–40 b) Assume we want to reach Y* = 2700 by changing government transfer payments (TR) instead. By how much should TR be changed?
Using a three sector open circular flow of income model: a. Explain what is meant by equilibriumb. Explain the conditions for the circular flow of income to be in equilibrium
Assume the following model of the expenditure sector: S=C+I+G+Nx TR=100 C=420+(4/5)YD I=160 G=180 Nx=-40 YD=Y+TR-TA TA=(1/6)Y Assume we want to reach Y*=2,700 by changing government transfer payments (TR) instead. By how much should TR be changed?
Suppose an economy produces only 2 products that will also be used for directconsumption, as per the article at the end of the exam: chicken wings and donuts. Inthe second quarter of 2021 (the base period), 180,000 pounds of chicken wings wereproduced, at a value of $3.50 per pound, while in the second quarter of 2022,production of chicken wings increased to 200,000 pounds, at a value of $3.75 perpound. In the second quarter of 2021 (the base period), 85,000 donuts were producedat a value of $0.85 per donut, while in the second quarter of 2022, donut productionincreased to 100,000 donuts, each at a value of $0.95 per donut. The population inthis economy is 1000 individuals in 2022, while the number of hours worked in 2022is 5000. Also, the quantities that were produced in 2021 represent the quantities thatwere purchased by the typical household, meaning that everything that was producedwas sold.d. Solve for the amount of labor productivity in the second quarter of 2022.e. Solve for the…
Theo, a single taxpayer, actively participates in a rental real estate activity. During the year, his total rental real estate income was $25,000. His only other income for the year was $180,000 in wages. He does not have any adjustments to income, nor does he have any expenses allocable to investment income. How much of Theo's income is subject to the net investment income tax? $0 $5,000 $25,000 $205,000
Use two diagrams to explain the effects of the determinants of aggregatedemand on real GDP in a nation. ii. Suppose there is an expectation of a rapid general price increase in goodsand services in Australia in January 2021. Examine the effects of theanticipated general rapid increase in price for goods and services.