If consumption is $300 billion, investment is $100 billion, government purchases are $200 billion, exports are $200 billion, and imports are $100 billion, calculate GDP. (Just leave the numbers in billions.) 8. In the previous problem, is the country running a trade deficit or surplus?
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If consumption is $300 billion, investment is $100 billion, government purchases are $200 billion, exports are $200 billion, and imports are $100 billion, calculate
8. In the previous problem, is the country running a
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- A) Does this economy have a trade deficit or a trade surplus? B) What is the GDP for this economy? C) What method are we using here to compute GDP? (Income, production or expenditure)1: National income level in an open economy with government activities and data in the table what is it? Be sure to show how you did the calculation. GDP = 2,000 Gross investment = 500 Net investment = 300 Indirect taxes = 350 Subsidies = 250 Direct taxes = 200 Net foreign factor income = 40010. Following are data relating to a nation's operations last year. Capital consumption allowances Undistributed corporate profits Personal consumption expenditures Personal savings Corporate inventory valuation adjustment Federal govemment deficit Govemment purchases of goods and services State and local governments surplus Net exports of goods and services Gross private domestic investment $150 million 40 million 450 million 50 million -5 million -30 million 10 million 1 million -2 million 200 million a. Determine the nation's gross domestic product (GDP).
- QUESTION 5 5. You are given the following information about an economy: $millions GDP at Market Prices 1,,669.4 290.5 Imports Gross Domestic Capital Formation Income accruing to the Public Sector Retained Business Earnings 48.7 39.0 75.9 273.4 Exports Subsidies 16.8 Factor Payments from Abroad Capital Consumption Allowance 10.0 10.5 19.2 Income Payments to Foreigners Direct Taxes Public Sector Consumption Expenditure Indirect Taxes Transfer Payments 355.6 490.1 297.3 25.7 Derive the following: (i) (ii) National Income Net Investment Personal Income Disposable Income Household Consumption Expenditure1. Given the following national income and product accounts data, compute I, NX, NI, PI, DI, NNP, GNP, and GDP Depreciation Amount of national income not going to households Compensation of employees Corporate profits Dividends Exports Government consumption and gross investment Imports Indirect taxes minus subsidies Net business transfer payments Net interest Net private domestic investment Personal consumption expenditures Receipts of factor income from the rest of the world Personal income taxes Proprietors' income Payments of factor income to the rest of the world Rental income Statistical discrepancy Surplus of government enterprises 3. 12,532 2005 489.4 2006 505.7 12,746 2007 526.7 13,011 2008 553.0 13,275 2009 565.8 13,503 2010 563.1 2011 553.5 13,757 1,215 The following table provides information about Canadian economy for a seven-year period, given 2006 is the base year. Year Real GDP Labor force Unemployed Employed Unemployment Population (Billions) (Thousands) (Thousands)…1. Transfer payments are: A) payments made to firms for investment. B) payments that do not require a good or service in exchange. C) considered a part of government purchases. D) an important component of GDP because they increase consumption spending. 2. A country's exports minus its imports measures: A) net exports. B) gross exports. C) net imports. D) gross imports. 3. A trade deficit occurs when: A) foreign remittances paid are less than foreign remittances received. B) exports are less than imports. C) exports equal imports. D) exports are greater than imports.
- 1. How could a greater fiscal deficit create a greater trade deficit? 2. What would you do to reduce the deficit? 3. What is the opportunity cost of government spending on servicing the interest on the debt. 4. If the federal government wished to reduce the deficit to any significant degree without raising taxes, where would the reduced spending likely to have to come from? 5. Assume the federal government replaces the federal income tax with a sales tax placed on consumption expenditures. Analyze the impact of this tax change on taxation efficiency and equity.If consumption is $11 trillion, investment is $2 trillion, government purchases are $3 trillion, exports are $2 trillion and imports are $3 trillion, calculate GDP. Use the formula GDP = C + I + G + (X – IM). I suggest just leaving the numbers in trillions (rather than adding in 9 extra zeroes). In the previous problem, is this country running a trade deficit or surplus?6. After a tax increase, households often reduce spending and save more. This canresult in:a. An increase in the national budget deficitb. An increase in public and private savingsc. A long-run decrease in capital accumulationd. A short-run decrease in national savings and investment, and a long-rundecrease in productivity
- Assume that the Gross Domestic Product is $6000, personal disposal income is $5100, the government deficit is $100, consumption is $3800 and trade deficit is $100. Calculate Private savings Investment Government spending National savings Taxes Public savingsIf imports exceed exports, is it a trade deficit or a trade surplus? What about if exports exceed imports?Essay 3 The result of government deficits is that less savings are available to firms for investment. Explain why and what it means for the economy.