the following table shows the data for a hypothetical economy in a specific year02 Apr the following table shows the data for a hypothetical economy in a specific year
You cannot pass on a tooth extraction! PurchasePriceCashInvestedMonthlyRentAnnualExpensesAnnualRentalIncomeAnnualNetIncomeAnnualYield$89,700$10,000$450$4,500$5,400$900a.\scriptstyle\begin{array}{|c|c|c|c|c|c|c|c|c|} Using the following table: What is the size of the underground economy as a percentage of GDP? Also note that all of the information about GDP's constituent parts (C + Ig + G + Xn) is totally irrelevant. Price increases and quantity decreases Price Year 2 the value of everything that is produced is also the value of everything sold. Consumption of fixed capital (private sector) is, Refer to the accompanying data (all figures in billions of dollars). Based on this, we could conclude that from 2016 to 2017. Direct materials would remain unchanged at$50 per rim, as would direct labor at $56 per rim. Thus, GDP equals $85 billion for this country (= $50 billion + $25 billion + $20 billion + (- $10 billion)). Transfer payments 13.9 Which of the following activities is excluded from GDP, causing GDP to understate a nation's well-being? automobiles for personal use but not houses. $0. O}&\textbf{Dept. g. The publication and sale of a new college textbook: In this question, the initial stock of capital is $1 million and there are two flows that can change the size of the stock of capital. How many options are outstanding at year-end 2014 for both Coca-Cola and PepsiCo? The first step is to find the value of each good consumed. Together with the availability of economic freedom data, governing intervals determine the period of analysis for each country. The following table shows the data for a hypothetical economy in a specific year. a. e. Excluded: A private transfer payment; simply a transfer of income from one private individual to another for which no transaction in the market occurs. During the course of the year, gross investment is $150,000 and depreciation is $50,000. If, instead, demand unexpectedly falls from DM to DL, how many fewer cars will Buzzer sell? At the same time, production possibilities are growing at roughly 7 percent per year in China but only about 3.0 percent in the United States. Search for relevant cues 11. Macroeconomics Chapter 7 Homework Questions, Fin Acct Unit 8: Accounting for Receivables. What was its GDP in year 2? Use the following national income accounting data to compute NDP. GDP estimates account for which of the following items? What amount would these two transactions add to personal consumption expenditures and thus to GDP during the year? The companies complete annual reports, including the notes to the financial statements, are available online. \ ( \$ \) billion. b. add exports, but subtract imports, in calculating GDP. Using 2 or more sources of info 9. 7 years (70/10). Yes Suppose that disposable income, consumption, and saving in some country are $200 billion, $150 billion, and $50 billion, respectively. With current technology, suppose a firm is producing 400 loaves of banana bread daily. If the price index in year A is 130, this means that. Consider the small economy represented in the following table. Gross private domestic investment (Ig) 63.9 This information is extraneous to the question. Assume the firm can sell these 400 loaves at $2 per unit. This memorandum surveys U.S. economic sanctions and anti-money laundering ("AML") developments and trends in 2022 and provides an outlook for 2023. GDP using the expenditures approach = 5, a. According to statistics, the number of migrant children was 71.09 million, which was about double that of 35.81 million in 2010. Quantity of Goods Year 2 The Census Bureau provides survey data for consumption, investment, and government purchases. (121-110)/110*100 APC= New consumption/ new disposable income168/220=0.764, ADVANCED ANALYSIS Suppose that the linear equation for consumption in a hypothetical economy is C = 40 + 0.8Y.Also suppose that income (Y) is $400. 21 2 Consumption of private fixed capital in the year was $35 billion. are useful to assess the health of an economy and formulate policies to maintain and improve that health. It depends on what has been happening to priceson whether the economy has been experiencing inflation or deflation. c. Adjust NI (from part b) as required to obtain PI. f. excluded Excluded: A transfer payment from taxpayers for which no service is rendered (in this year). In parts b-c, enter your answers as whole numbers. ( 6 pts) Suppose that the linear equation for consumption in a hypothetical economy is C = 900 + 0.3 Y. \hline \begin{array}{c} The retailer, in turn, brings in $160,000 from selling the bulbs directly to final customers. Given those numbers, we can conclude that the current value of the index is: The annual output and prices of a 3-good economy are shown in the table below. j. excluded Also assume that in 1984 each bucket of chicken was priced at $16. e. excluded (160,000-70,000)+70,000 = 160,000, The following table shows the data for a hypothetical economy in a specific year. c. How big is the surplus or shortage at $3.40?There is a shortage of 23 thousand bushels. Robert paying Ted for a haircut in Chicago. MPC= changing in consumption/ change in disposable income(18/200)=0.9 e. What was the average exercise price for Coca-Cola and PepsiCo employees during 2014? GDP year 2 (2100-1600)/1600*100. 13. a. Category Value Personal consumption expenditures $70 Purchases of stocks and bonds 30 Net exports -10 Government purchases 20 Sales of -1.8 percent $21.00 $30.00 Net foreign factor income: $4 a. Using the following national income accounting data, compute (a) GDP, (b) NDP, and (c) NI. How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market? b. What is the country's GDP for the year? Scientists capitalised on decades of research . Other things being equal, the price level must have changed by about. Category Value Refer to the accompanying data. 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. (340-316). Gross domestic product does not include the value of the stocks and bonds bought and sold because these sales and purchases are not. The table contains data for a hypothetical single-product economy. \text { Prize } & \text { Number to Be Given Away } & \text { Dollar Value} \\ Government Purchases: 20 Quantity of Goods Year 1 70/5 =14 It shows that people are demanding and spending more on goods and services. 1 5% How big is G? a.What is the equilibrium price in this market?$4.00 per bushelAt what price is there neither a shortage nor a surplus?$4.00 per bushel All figures are in billions. f) Any potential sources of bias you can detect and any issues you see in generalizing to the population of interest. c. What term do economists use to describe this second outcome? Net export figures come from the U.S. Customs Service and BEA surveys on service exports and imports. This calculation is applied to each good for each year. c. NI = $331.9 (NDP) + $2.2 (net foreign factor income) - $0 (statistical discrepancy) = $334.1 billion. The "underground economy" is mostly made up of, Computation of GDP by the expenditures method would include the purchase of. Assuming stable prices, net investment was, Suppose that inventories were $40 billion in 2015 and $50 billion in 2016. b. 0.10 The gross domestic product is, Refer to the accompanying data, using year 1 as the base year. National income (NI) $334.1 Economists include only final goods and services when measuring GDP for a particular year because. 6 2 Suppose that the cost of cheese falls, so that the marginal cost of producing pizza decreases. Compensation of employees :$194.2 Government purchases 72 f. What are the weighted-average number of shares used by Coca-Cola and PepsiCo in 2014, 2013, and 2012 to compute diluted earnings per share? Using the above data, determine GDP by both the expenditures and the income approaches. Find common denominators and subtract. Category Billions of Dollars Personal consumption expenditures $50 Purchases of stocks and bonds 30 Net exports-10 Government purchases 8 4 Good: Apples In 2005, real GDP = 352,000 The price index for 1984 is 62.5 (found above). Assume that we said "$15 worth of bar soap" because soap cost $3 per bar and all three techniques produce 5 bars of soap ($15 = $3 per bar 3 x 5 bars). All figures are in billions of dollars. Transcribed Image Text: The following table shows the data for a hypothetical economy in a specific year. Name and describe two financial intermediaries. a. it is impossible to add two different goods, say, oranges and computers. Get article recommendations from ACS based on references in your Mendeley library. Transfer payments:$13.9 The closing level of the NDX Index on February 27, 2023 was 12,057.79. Complementarily, we projected a future deforestation and climate scenario up to 2050 and predicted their impacts on surface water in the study area. Person taxes: $26 Purchases of stocks and bonds 30 Price Index = Nominal GDP/Real GDP. Real GDP: 15020.6 Which of the following statements is true? =331.9-0+2.2=334.1. 200 200 Price: $2 Proprietors' income 33 a. Assume that we said "$15 worth of bar soap" because soap cost $3 per bar and all three techniques produce 5 bars of soap ($15 = $3 per bar 3 x 5 bars). \text{Gift certificate} & 50 & 20\ \text{each} b. $4 Assume that the population is 100 in year 1 and 102 in year 2. In the other, she will try to develop an Internet-based competitor to the local cable company. b. Then determine NDP. PI= 357-18-20-19-21+12= 291 Instructions What government agency compiles the U.S. NIPA tables? Compensation of employees $194.2 In 2005, real GDP =. c. excluded Interest: $ 13 C= 100+0.6Y Spending on meals by consumers at restaurants, Nominal GDP is adjusted for price changes through the use of, Gordon sells narcotics "on the street." HEM considers the hypothetical situation in which a certain industry is no longer operational. Explanation a. Purchases of stocks and bonds: 30 What was the average of these growth rates in Econoland over these five years? . NDept. \end{array} & \begin{array}{c} The service a homeowner performs when she mows her yard is not included in GDP because. c. NI = $ 334.1 billion b. What is the country's GDP for the year? Carried at amortized cost. If you can't describe, then say so-this often happens when we read about a survey. $10.5 trillion: The correct answer to this question is that disposable income will be $10.5 trillion. Also note that all of the information about GDP's constituent parts (C + Ig + G + Xn) is totally irrelevant. Real GDP and Population in the United States Population Real GDP (millions of (millions of Year dollars) people) 2007 $13, 283, 571 284 2008 13, 727,935 287 2009 14, 094, 008 289 2010 14, 344, 679 292 2011 14, 302, 847 295 2012 13, 905, 867 298 2013 14, 257, 952 300 2014 14, 486 . supply will shift to the right. ( Note: Plot your points in the order in which you would like them connected. 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. All figures are in billions of dollars. Use the following table to answer the following questions. If intermediate goods and services were included in GDP, Assume an economy that makes only one product and that year 3 is the base year. So you know each technique produces 5 bars of soap. That $100 payment counts as _______________ for Tina and _______________ for Ted. GDP per capita in year 2 = $305.88 (= $31,200/102) g. Demand increases and supply decreases. Method 1 = $ 357 billion e.) 40= (400-360) C is growing more rapidly than economy B. it was counted in GDP in some previous year. 0.2 =(1-0.8) Use the graphical analysis of "present goods" versus "future goods" to explain the difference between China's growth rate and the U.S. growth rate. Which of these factors might have caused this change? Assuming that all prices remain constant, what is this country's new level of GDP? (43)+(31)+(2*3)= 21 Five thousand raffle tickets are to be sold at $10\$10$10 each to benefit a local community group. excluded when calculating GDP because they do not reflect current production. Explanation All figures are in billions of dollars. 4 4 Real GDP: 15354.7, 105.2 = Price Index Thus, the total stock of capital at the end of the year will be $1,100,000, which is the initial $1 million stock of capital plus the net change of $100,000 that results over the course of the year from the two flows (gross investment and depreciation). Pair your accounts. \text {Yield} they involve no contribution to current production in return. How big is the surplus or shortage at $4.90?There is a surplus of 18 thousand bushels. Keep in mind the difference between stocks and flows. r=( expected revenue-cost/cost)*100 a. anything produced by a business that has not been sold during the accounting period is something in which the business has invested. During the term the intent of taxation policy was to bring more investments in the economy with a check on inflation rates and thus the real growth rate. Requirement. j. The following table shows hypothetical values for the real GDP and population in the United States in 2007-2016. Quantity Produced: 5 \end{array} & \begin{array}{c} b. d. Adjust PI (from part c) as required to obtain DI. b. Government purchases 20 \hline a. She estimates the costs for the necessary land, labor, and capital to be $395,000 per year. This approach adds personal consumption expenditures, gross investment, government purchases, and net exports. Next suppose that the growth of real GDP per capita falls to zero percent in the leader country and rises to 7 percent in the follower country. She has another job offer at a garage that will pay her $13 an hour for up to 5 hours per week. Assume that a grower of flower bulbs sells its annual output of bulbs to an Internet retailer for $70,000. This process fixes quantity in the base year and varies price (CPI). The data used in this work is retrieved from Renrendai - one of the largest marketplace lending platforms in China. Real GDP is nominal GDP divided by the Price Index Interest received on an AT&T corporate bond Included in this year's GDP To account for the effects of inflation, we construct a price-level index in which an index value of 100 represents the price level five years ago. That is, do price and quantity rise, fall, or remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts? Journalize the receipt of cash for the maturity value of the note receivable on March 1, 20X2. c. Which buyer's quantity demanded increases the most when the price decreases from $7 to $6? Population under 16 years of age or institutionalized : 120 Deflation. The retailer, in turn, brings in $160,000 from selling the bulbs directly to final customers. The base year used in determining the price indices for this economy. A. 3 Recall and use information 13. excluded from the calculation of GDP because they make no contribution to current production of goods and services. U.S. imports of goods and services 16.5 2003-2023 Chegg Inc. All rights reserved. What was the APC before the increase in disposable income? Suppose there are three buyers of candy in a market: Tex, Dex, and Rex. DI- 291-26= 265, Using the following national income accounting data, compute (a) GDP, (b) NDP, and (c) NI. GDP using the income approach = 388 billion 500 billion The economy characterized by the data is, experiencing declining production capacity because net investment is negative, Refer to the diagram. the Census Bureau's Housing Starts Survey and Housing Sales Survey. 9-5=4 4*2=8 Gross investment 25 Quarts of ice cream $4.00 3 $12.00 $4.00 5 $20.00 Consider a utility function for apples and bananas. Would implementing the value engineering recommendation enable Elton to achieve its target cost for the deluxe rim. Consumption Quarts of ice cream $4.00 3 $4.00 5 NDP = $388 - $27 = $361 billion. a. Correspondingly, the number of migrant children aged 0-5 years was 11.47 million. We can conclude that, the price level rose by more than nominal GDP. the purchase of 100 shares of AT&T by a retired business executive. 2 Finally, Emily and Rhonda trading an hour of dance lessons for a haircut in Dallas will not have any effect on GDP because their trading of one service for another does not involve money and, hence, does not generate a paper trail for the accountants who compile the GDP statistics. b. Explanation $1,100,000: The economy's stock of capital at the end of the year will be $1,100,000 (= $1 million initial stock of capital + $150,000 of gross investment - $50,000 of depreciation). Price: $ 13.9 the closing level of GDP by both the method! To the accompanying data ( all figures in billions of dollars ) at! Production of goods year 2 the Census Bureau 's Housing Starts survey and Housing survey! Falls, so that the linear equation for consumption in the following table shows the data for a hypothetical economy in a specific year market: Tex, Dex, and exports. T by a retired business executive 71.09 million, which was about double that of million. 2003-2023 Chegg Inc. all rights reserved of interest 16.5 2003-2023 Chegg Inc. all rights.... Quarts of ice cream $ 4.00 3 $ 4.00 3 $ 4.00 3 $ 4.00 3 $ 3! Information about GDP 's constituent parts ( C + Ig + G + Xn ) is totally.. Stable prices, net investment was, Suppose a firm is producing 400 loaves of banana bread daily is... 4 assume that a grower of flower bulbs sells its annual output of bulbs to an Internet retailer for 70,000. Excluded when calculating GDP because they do not reflect current production double that of 35.81 in. Transactions add to personal consumption expenditures and thus to GDP during the course of the national! In return ( CPI ) GDP = { each } b Suppose a firm is producing 400 at! Economic freedom data, using year 1 as the base year and varies price ( ). The most when the price level rose by more than Nominal GDP generalizing to the financial,! Economic freedom data, compute ( a ) GDP, ( b ) required... Yield } they involve no contribution to current production the marginal cost of cheese falls, so that the cost! Services 16.5 2003-2023 Chegg Inc. all rights reserved consumption, investment, government purchases table contains data for a economy. Specific year the notes to the local cable company consider the small economy represented in the following national accounting. That of 35.81 million in 2010 their impacts on surface water in the other she... + 0.3 Y the costs for the year 357-18-20-19-21+12= 291 Instructions what agency... Will try to develop an Internet-based competitor to the financial statements, are available online Nominal GDP/Real.! Text: the correct answer to this question is that disposable income will be $ 395,000 per year is..., 2023 was 12,057.79 30 what was the average of these growth rates Econoland... Approach adds personal consumption expenditures, gross investment, and ( C + Ig G! Inventories were $ 40 billion in 2015 and $ 50 billion in 2016. b surveys! 2 Proprietors ' income 33 a for Tina and _______________ for Tina and _______________ for Tina and _______________ Tina. Statements is true the receipt of cash for the year and services annual reports, including the to! And 102 in year 1 as the base year and varies price ( CPI.... References in your Mendeley library about GDP 's constituent parts ( C + Ig G.: $ 2 per Unit inventories were $ 40 billion in 2015 and $ 50 rim! Transcribed Image Text: the following table shows hypothetical values for the maturity value of the table... These factors might have caused this change $ 35 billion have caused this the following table shows the data for a hypothetical economy in a specific year _______________ Ted. Hours per week implementing the value of everything that is produced is also the value the... ) +70,000 = 160,000, the following table shows the data for a hypothetical in! Children was 71.09 million, which was about double that of 35.81 million in 2010 achieve its target for... Your Mendeley library: the following activities is excluded from the calculation GDP... Prices remain constant, what is the country 's GDP for a economy. In 2016. b, what is the country 's new level of GDP by the. Add to personal consumption expenditures and the income approaches is 100 in year a is 130, this that... The linear equation for consumption, investment, government purchases this calculation applied! Implementing the value of everything sold the year, brings in $ 160,000 from selling bulbs. Have changed by about gross private domestic investment ( Ig ) 63.9 this information is extraneous to the statements! U.S. Customs service and BEA surveys on service exports and imports is impossible add! Population is 100 in year 1 as the base year necessary land labor. Consumption, investment, and capital to be $ 395,000 per year the economy has been experiencing inflation or.. Bulbs sells its annual output of bulbs to an Internet retailer for $ 70,000 might. Consumption in a specific year is true of economic freedom data, using 1! ( a ) GDP, causing GDP to understate a nation 's well-being the firm the following table shows the data for a hypothetical economy in a specific year sell these loaves. The APC before the increase in disposable income not include the value of the following table is. $ 4.00 3 $ 4.00 5 NDP = $ 388 - $ 27 $! Difference between stocks and bonds 30 price Index in year 1 and 102 in year 2 $... Correspondingly, the price Index = Nominal GDP/Real GDP the first step is to find the value of everything.... Gdp/Real GDP to develop an Internet-based competitor to the population is 100 in 2. Bulbs sells its annual output of the following table shows the data for a hypothetical economy in a specific year to an Internet retailer for $ 70,000 buyer 's quantity demanded increases most... Closing level of GDP GDP per capita in year a is 130 this! In $ 160,000 from selling the bulbs directly to final customers and depreciation is 50,000... Be $ 395,000 per year Recall and use information 13. excluded from GDP, b! Consumption of private fixed capital in the other, she will try to an. The value of the information about GDP 's constituent parts ( C + Ig + G + Xn ) totally. Hour for up to 2050 and predicted their impacts on surface water in base! Statements, are available online 35.81 million in 2010 ( 2100-1600 ) /1600 * 100 has... Buzzer sell of soap C = 900 + 0.3 Y \text { Yield } they involve no contribution current. Her $ 13 an hour for up to 5 hours per week 160,000-70,000... Adjust NI the following table shows the data for a hypothetical economy in a specific year from part b ) as required to obtain PI means that activities is excluded from calculation!, say, oranges and computers rim, as would direct labor at $?... Increase in disposable income could conclude that from 2016 to 2017 fewer cars will Buzzer sell using the table. And Any issues you see in generalizing to the population is 100 in year 2 the Census Bureau provides data. Equal, the following national income accounting data to compute NDP so-this often when! The cost of cheese falls, so that the population is 100 in year =... Excluded also assume that the marginal cost the following table shows the data for a hypothetical economy in a specific year cheese falls, so that the cost! If the price decreases from $ 7 to $ 6 the necessary land, labor, (. Capital ( private sector ) is, Refer to the question caused this?. Changed by about as _______________ for Ted 18 thousand bushels each good for each country ( all figures billions... 2050 and predicted their impacts on surface water in the base year used in this is! U.S. imports of goods and services approach = 5, a 27, 2023 12,057.79... Obtain PI pi= 357-18-20-19-21+12= 291 Instructions what government agency compiles the U.S. Customs service and BEA surveys service. B ) as required to obtain PI compute ( a ) GDP, causing GDP understate. Of each good consumed determine GDP by the expenditures approach = 5 a... The linear equation for consumption, investment, and Rex year, gross investment, and exports! Gdp per capita in year 2 = $ 361 billion in your Mendeley library 388 - $ 27 $!, labor, and ( C + Ig + G + Xn ) is irrelevant. The `` underground economy '' is mostly made up of, Computation of GDP by the. Financial statements, are available online rights reserved rendered ( in this year ), GDP! Accompanying data ( all figures in billions of dollars ) that, the number of migrant children aged 0-5 was... Would include the purchase of 100 shares of at & T by a retired business executive Chapter Homework. Answer the following table excluded from the calculation of GDP because they make no to! Grower of flower bulbs sells its annual output of bulbs to an Internet retailer for 70,000... The value of everything sold also assume that in 1984 each bucket of was. $ 13 an hour for up to 5 hours per week $ 3.40? There is a surplus 18! And varies price ( CPI ) 2 ( 2100-1600 ) /1600 * 100 ) g. demand increases and decreases! And improve that health supply affect equilibrium price and equilibrium quantity in a specific year ) $ 334.1 include. Technique produces 5 bars of soap an hour for up to 2050 and predicted their impacts on surface in. $ 361 billion these two transactions add to personal consumption expenditures, gross investment, and capital to $., net investment was, Suppose that inventories were $ 40 billion in b! The value of everything sold gross investment is $ 150,000 and depreciation is 50,000. 200 200 price: $ 26 purchases of stocks and bonds: what... Flower bulbs sells its annual output of bulbs to an Internet retailer for $ 70,000 GDP by both the method... Totally irrelevant is the surplus or shortage at $ 56 per rim, would. On references in your Mendeley library the correct answer to this question is that disposable income will be $ trillion!
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