If depreciation exceeds gross investment: the economy's stock of capital is growing. the economy's stock of capital is shrinking. net investment is zero. O the economy's stock of capital may be either growing or shrinking.
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- Calculate the value of an economy's rate of depreciation, if its saving rate is 9%, total capital stock is 1500 units, its labour force includes 100 workers and total output is 500.a. Show the national income identity equation for a closed economy. b. Use the expression in a to show the equality between national saving and investment. What is the representation of private saving and what is the representation of public saving?Indicate the statement True or False 1) Physical capital, denoted by K, does not affect Gross Domestic Product in the long-run.
- Assume that a national restaurant firm called BBQ builds 10 new restaurants at a cost of $ 1 million per restaurant. It outfits each restaurant with an additional $ 200,000 of equipment and furnishings. To help partially defray the cost of this expansion, BBQ issues and sells 200,000 shares of stock at $ 30 per share. A) What is the amount of economic investment that has resulted from BBBQ's actions? ( in millions) B)How much purely financial investment took place?True/False and Explain If the real rate of return on investment is higher in the US than in Canada, capital will tend to flow out of the US and into Canada.The financial markets play an important role in channeling funds from savers to borrowers. Which of the following illustartes this function of financial market? A) Investors purchase assets like real estate and gold from other investors B) Investors purchase securities that are issued by firms and government C) Investors deposit funds into interest bearing accounts which are then loaned to borrowers D) Investors purchase capital goods which are used in production by borrowers
- Assume that a national restaurant chain called BBQ builds 20 new restaurants at a cost of $1 million per restaurant. It outfits each restaurant with an additional $400,000 of equipment and furnishings. To help partially defray the cost of this expansion, BBQ issues and sells 400,000 shares of stock at $40 per share. a. What is the amount of economic investment that has resulted from BBQ’s actions? $_________ million b. How much purely financial investment took place? $__________ millionDuring the year, suppose a country's total purchases of newly produced capital goods is $2,000 billion, it issues $1,600 billion of stock certificates, and has $500 billion in depreciation. Gross investment in this country equals A. $4,100 billion. B. $2,100 billion. C. $3,600 billion. D. $2,000 billion. E. $2,500 billion.The following are a year's data for a hypothetical economy. Comsmption $400B, Government purchases $350B, GDPI $150B, Exports $150B, Imports $100B, Depreciation $50B. a) what is the value of GDP and NDP? b) what is the value of Net private Domestic investment ? c) suppose that in the next year exports increases to $175B, imports increase to 200B, and consumption falls to 350B. What will GDP be in that year?
- National Income: Where It Comes From and Where It Goes — End of Chapter Problem If consumption depends on the interest rate, saving will also depend on it. In particular, the higher the interest rate, the greater will be the return to saving. Hence, the supply of loanable funds will be represented by an upward-sloping, rather than a vertical, curve. National saving is the sum of public saving and private saving. Investment in this analysis is private investment. It does not include public investment.Suppose that Consumption = $260 billion, Net Investment = $20 billion, Depreciation = $60 billion, Government Spending = $80 billion, Taxes = $100 billion, Net Exports = $20 billion, and Imports = $40 billion. What does exports equal as a percent of GDP? Select one: a. 8.7% b. 10.0% c. 13.6% d. 15.2% e. 18.0%Suppose GDP is $16 trillion, with $10 trillion coming from consumption, $2 trillion coming from gross investment, $3.5 trillion coming from government expenditures, and $500 billion coming from net exports. Also suppose that across the whole economy, depreciation (consumption of fixed capital) totals $1 trillion. From these figures, we see that net domestic product equals: multiple choice $17.0 trillion $16.0 trillion $15.5 trillion None of the above