Foundations of Economics, Student Value Edition Plus MyLab Economics with eText -- Access Card Package (8th Edition)
8th Edition
ISBN: 9780134641843
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 7MCQ
To determine
To select:
The option which shows the item of real flow in the circular flow model.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
· How economists are both scientists and policymakers and what process society uses to allocate its scarce resources. · Using the circular flow model, explain the flow of money and goods in an economy. · How does the economy coordinate society's independent economic actors. · A country's gross domestic product (GDP) and how it is defined and calculated. · How the consumer price index (CPI) is constructed and why it is an imperfect measurement of the cost of living.
The table below presents a brief summary of City A’s total spending, local GDP, and population changes. Read the table and answer the following questions.
2010
2020
Total spending ($ million)
89
104.12
Local GDP ($ millions)
110
134
Population
50,000
56,275
CPI deflators (2012=1)
0.96
1.05
Calculate per capita spending in 2010 and 2020, respectively, using constant dollars.
*Results round to the nearest dollar.
2010 per capita spending:
2020 per capita spending:
2. Calculate the compound annual growth rate of per capita spending from 2010 to 2020
3. Calculate spending-to-GDP ratios in 2010 and 2020, respectively.
*Results round to the nearest 2 decimal places.
2010 spending-to-GDP ratio:
2020 spending-to-GDP ratio:
Interpret what the two spending-to-GDP ratios tell us about City A’s spending trend.
4. Assuming City A’s population grows at a constant rate in the next decade.…
Draw a circular-flow diagram for a four-sector economy. Identify the each part of the model that correspond to the flow of inputs/resources/goods and services and the flow of rupees/expenditure/income/revenue/receipts.
Chapter 2 Solutions
Foundations of Economics, Student Value Edition Plus MyLab Economics with eText -- Access Card Package (8th Edition)
Ch. 2 - Prob. 1SPPACh. 2 - Prob. 2SPPACh. 2 - Prob. 3SPPACh. 2 - Prob. 4SPPACh. 2 - Prob. 5SPPACh. 2 - Prob. 6SPPACh. 2 - Prob. 7SPPACh. 2 - Prob. 8SPPACh. 2 - Prob. 9SPPACh. 2 - Prob. 10SPPA
Ch. 2 - Prob. 1IAPACh. 2 - Prob. 2IAPACh. 2 - Prob. 3IAPACh. 2 - Prob. 4IAPACh. 2 - Prob. 5IAPACh. 2 - Prob. 6IAPACh. 2 - Prob. 7IAPACh. 2 - Prob. 8IAPACh. 2 - Prob. 9IAPACh. 2 - Prob. 10IAPACh. 2 - Prob. 11IAPACh. 2 - Prob. 1MCQCh. 2 - Prob. 2MCQCh. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Prob. 6MCQCh. 2 - Prob. 7MCQ
Knowledge Booster
Similar questions
- The top table describes an economy's labor market and the bottom table describes its production function. Potential GDP is $ ____ .arrow_forwardRefer to Table 4.3 “The Model’s Prediction for Per Capital GDP” on page 83. Why is the “observed per capita GDP” in the last column 1.000 for the U.S.? A. The U.S. per capita GDP was $1,000 in real terms for the year given in the table B. It means the U.S. economy produces 100% of what it’s supposed to produce C. It means the U.S. economy uses 100% of all available capital in the country D. U.S. values are set, or normalized, to 1 while the other countries’ values are all relative to the U.S. valuesarrow_forwardQ2: b) Consider the following data on the Pakistan economy: (Solve in White black paper) Nominal GDP GDP Deflator Year (in billions of rupees) (base year 2012) 2018 21,501 111.4 1998 9,163 76.3 iv. What was real GDP in 2018 measured in 2012 prices? v. What was the growth rate of real GDP between 1998 and 2018? vi. Was the growth rate of nominal GDP higher or lower than the growth rate of real GDP? Explain.arrow_forward
- Economy can be represented by economic models. One of the models we use to understand economy is a “Circular Flow Diagram”. Sketch a Circular flow model and explain the flow of money and flow of goods and services and factors of production caused by the following activities. i. Kaleem pays a shopkeeper Rs.150 for a liter of milk. ii. Mustaqeem while working at a fast-food restaurant earns Rs.500 per hour. iii. Sana spends Rs.500 on a haircut. iv. Mustafa receives Rs.200,000 from his 10 percent ownership of Salman Chemicals Ltd.arrow_forwardCase: Suppose you are watching a news report with a friend. The news report points out that a certain African nation generates a GDP per capita of only $1300 per year. Since your friend knows that Slovenia’s GDP per capita is approximately $26 000, he suggests that Slovenians are materially 20 times better off than the people of the African nation. 2. What general category of production is not captured by GDP in both the Slovenia and the African nation?arrow_forwardIn the circular flow model, the factors of production flow in the?arrow_forward
- The table below gives economic data for the small island economy of St. Artie's. All data was computed at the end of each year. Year GDP Deflator Nominal GDP 2017 100 2,000,000 2018 110 2,090,000 2019 115 2,190,000 2020 121 2,400,00 What was the Real GDP growth rate between the end of 2017 and the end of 2018? Group of answer choices 4.5% 10% -5% -10%arrow_forwardFrom the World's Largest Economies 2016 visual, we can conclude which of the following to be the most true? A) China had the highest living standards in the world. B) People in Japan had higher living standards than people in Italy. C) The United States has had the highest living standards in the world for over a decade. D) There is no correlation between GDP and GDP per capita when measuring living standards.arrow_forwardExplain the circular flow of economic activityarrow_forward
- In the simple circular-flow diagram, who buys the factors of productionarrow_forwardWhich one is correct? A/B/C/ Last year, North End Coffee Roasters Bangladesh opened a number of branches at different location of Dhaka city. This event- A. Increases current year’s GDP B. Increases current investment expenditure C. Current GDP remains unchanged.arrow_forwardThe Importance of Productivity Two well-known economists, William Baumol and Alan Blinder, have stated that, in the long run, “nothing contributes more to reduction of poverty, to increases in leisure, and to the country’s ability to finance education, public health, environmental improvement and the arts” (1991, 356) than the rate of growth of productivity. 1. Define productivity. 2. See if you can verify Baumol and Blinder’s very strong claim (“nothing contributes more ...”) through the following exercise. Assume GDP in the United States is $10 trillion and that the labor force remains constant in size and fully employed. Estimate the value of GDP in one year’s time if productivity growth is 3%. What if it were only 2%? How much will GDP fall in two years’ time if productivity growth remains at 2% rather than 3%? In three years? 3. Why might environmental regulation reduce productivity growth? 4. Why might it increase…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
