First Homework AssignmentEconomics 121 Fall 2018 There are five questions. Each
ID: 1136293 • Letter: F
Question
First Homework AssignmentEconomics 121 Fall 2018 There are five questions. Each question is worth one point. Consider the following list of data for a country for a given year Amounts are in billions of dollars. In your answers, you may refer to the items by the abbreviations shown Item Stock of Capital at end of year (K) Change in Private Inventories (CI) Compensation of Employees Wages (W) 300 50 60 Consumption of Fixed Capital-Depreciation (DEPR) Government Consumption and Gross Investment (G) Gross Private Domestic Fixed Investment (FI) Interest (INT) Net Exports (XN) Profits (PROF) Proprietors' Income (PRIN) 15 13 -2 Purchases of Stocks and Bonds (SB) 13 Rents (RENT) Taxes on Production and Income (TAX) L.(er Compute GiosPrtsic Inesinhowour work. Show your work (b) Compute Gross Domestic Product (GDP) via the "expenditures"approach. Show your work 2. (a) Compute National Income. Show your work. (b) Compute Gross Domestis Income (GDD. Show your work 3. Statistical Discrepaney (SD) is zero. What does that imply regarding the relationship between GDP and GDI? Explain carefully and thoroughly 4. Two items in the list are negative. How can these items be negative and yet be components of GDP? Could these items be positive and still be components of GDP? Explain carefully and thoroughly 5. Two items in the list are not components of GDP Which are the items and why do they not enter GDP? Explain carefully and thoroughlyExplanation / Answer
1)
a) Gross private domestic investment = Change in inventories + Gross private domestic Fixed Investment
= -1+13 = 12
b) GDP by expenditure approach = Consumption + Gross Private Domestic Investment +Govt. Expenditure + NX
GDP = 60+12+15-2 = 85
2 a) National Income = Wages + Interest + Profits + Proprietor’s income+ Rent +Tax
National Income = 50+8+6+3+4+5 = 76
b) Gross domestic Income = 76
* WE are supposed to do only these many sub-parts. For solution to other parts please post as a different question.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.