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- 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…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…ADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that consumption is: C = 100 + 0.75Y Assume further that planned investment Ig and net exports Xn are independent of the level of real GDP and constant at Ig = 60 and Xn = 10. Recall also that, in equilibrium, the real output produced (Y) is equal to aggregate expenditures: Y = C + Ig + Xn Instructions: Round your answers to the nearest whole number.a. What is the equilibrium level of income or real GDP for this economy? Equilibrium GDP (Y) = $ . b. What happens to equilibrium Y if Ig changes to 40? Equilibrium GDP (Y) = $ . What does this outcome reveal about the size of the spending multiplier? Spending multiplier = .
- What is a foreign exchange rate? (a) The rate at which the currency of one country trades for the goods ofanother country.(b) The rate at which one country’s goods trade for those of another country.(c) The rate at which currencies of different countries are exchanged.(d) The rate at which one country’s currency trades for gold provided byanother country. Induced consumption is: (a) the part of consumption which is independent of the level of income.(b) the minimum level of consumption that is financed from sources other than income.(c) The maximum level of consumption that is financed from sources other than income.(d) shown by the slope of the consumption function. In the Keynesian model, an introduction of a proportional tax will: (a) increase the slope of the consumption function.(b) reduce the multiplier.(c) increase the equilibrium level of income.(d) increase the multiplier. A decrease in the price level will: (a) shift the AS curve to the left.(b) shift the AD curve to the…Suppose that a country produces 200 million dollar value of total outputin a year. The country produces only two goods: pepperoni pizzas andbottles of soda. The price of a pepperoni pizza is $5 and the price ofa bottle of soda is $2. Draw the country’s iso-value line on a graph. Ifthe price of a pepperoni pizza increases to $8, what will happen to thecountry’s iso-value line?You are given the following information about an economy : Gross private domestic investment =. 40Government purchase of goods and Services. =. 30 Gross national product ( GNP). =. 200Current account balance. =. -20 Taxes. =. 60Government transfer payment to thedomestic private sector. =. 25Interest payment from the governmentto the domestic private sector. =. 15Factor income received from rest of world. =. 7Factor payment made to rest of world. =. 9 Find the following, assuming that government investment is zero. : a) consumptionb) Net exportc) GDPd) net factor payment from abroade) private savingf) government savingg) national saving
- Question 2 Figure 23-1 L W L N M B Refer to Figure 23-1. Which of the following pairs correctly identify W and Y? a. Markets for factors of production and markets for goods and services O b. Firms and households O c. Expenditures and income O d. Consumption and investment +Suppose U.S. drivers purchased $50 billion of ExxonMobil-produced gasoline during a recent year, with one-half purchased directly from ExxonMobil-owned gas stations and one-half from independent (or third-party) gas stations. Suppose further that ExxonMobil purchased the oil (which it refined into gasoline) from foreign producers for $20billion and that it receives 60 percent of the sales revenue that independent stations generate from selling ExxonMobil gasoline. In this case, the value added by ExxonMobil to U.S. GDP is $__billion.1. Xanadu's desired national saving can be expressed as: O. Sd = 20 + 200r O. Sd = 10 + 200r O. Sd = 10 + 100r O. Sd = 15 + 200r 2. Xanadu's desired investment can be expressed as O. Id = 20 – 100r O. Id = 32 – 200r O. Id = 75 – 200r O. Id = 30 – 200r
- Suppose that in Zambia, people consume only two goods, peas and beans. Suppose that John, a citizen in that country has an income of ZMW10, the price of beans is 20N per kg and the price of peas is 40N per kg. Suppose that John consumes 30 kg of beans. Assume that he wants to spend all his income, how many kg of peas is he going to consume? Assume that the price of peas falls from 40N to 20N. Assuming that John still consumes 30kg of beans, find the new quantity of peas. After the decrease in the price of peas to 20N, assume that Jonh is just as well off as he was in (a) if he has an income of ZMW7.6. However, with that income and the new price of peas he would have consumed 20 kg of beans. Find the quantity of peas he would have consumed in this case. Find the substitution effect on consumption of peas due to the decrease in the price of peas in (c). Find the income effect on consumption of peas due to the decrease in income in (c). Question d and e to be solvedImagine that the U.S. economy finds itself in the followingsituation:agovernmentbudgetdeficitof$100 billion, total domestic savings of $1,500 billion, and total domestic physical capital investment of $1,600 billion.Accordingtothenationalsavingandinvestment identity,whatwillbethecurrentaccountbalance?What willbethecurrentaccountbalanceifinvestmentrisesby $50billion,whilethebudgetdeficitandnationalsavings remain the same?4.Explain why tourism satellite accounts are useful and give examples for direct and indirect effects (two examples for each).