Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 36.5, Problem 1QQ
To determine
Increase in resource availability.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Exercise 2
Consider a small open economy.
Assume that GDP (Y) is 5000. Consumption (C) is given by the equation C = 1000 + 0.25(Y-T). Investment (1)
is given by the equation I = 1500 ā 50r, where r is the real interest rate in percentage points. The world
interest rate is actually 5% (r*-5). Taxes (T) are 1000 and government spending (G) is 1500. Net exports are
given by the equation NX=500-250E.
1. Compute the equilibrium real exchange rate. Is the Purchasing Power Parity assumption respected?
Suppose that prices in the home currency are ten times smaller than prices in the dominant foreing
currency. Which is the nominal exchange rate?
2. Is the government budget in surplus or deficit? For each of the possible policy tools to achieve a
balanced budget, compute the equilibrium exchange rate and represent it graphically. Interpret
your results.
3. Suppose T and G at their initial values (1000 and 1500). Suppose there is a shift in the global supply
of funds, so that the new worldā¦
Argentina has net capital outflow of $2,000, government purchases of $10,000 and consumption of $40,000. Which of the
following is correct?
If its domestic investment is $2,000, its GDP is $52,000.
If its domestic investment is $4,000, its GDP is $56,000.
If its domestic investment is $10,000, its GDP is $58,000.
None of the above are correct.
b.
d.
A
B
D
b
Suppose a country, Macroland, doesn't trade with other countries. Its GDP is $20 billion. Its government purchases $3 billion worth of goods and services each year, collects $3 billion in taxes, and provides $1 billion in transfer payments to households. Private saving in Macroland is $4 billion. What is investment in Macroland?
Ā
Question 16 options:
Ā
$1 billion
Ā
$3 billion
Ā
$2 billion
Ā
$4 billion
Chapter 36 Solutions
Economics (Irwin Economics)
Ch. 36.1 - Prob. 1QQCh. 36.1 - Prob. 2QQCh. 36.1 - Prob. 3QQCh. 36.1 - Prob. 4QQCh. 36.4 - Prob. 1QQCh. 36.4 - Prob. 2QQCh. 36.4 - Prob. 3QQCh. 36.4 - Prob. 4QQCh. 36.5 - Prob. 1QQCh. 36.5 - Prob. 2QQ
Ch. 36.5 - Prob. 3QQCh. 36.5 - Prob. 4QQCh. 36 - Prob. 1DQCh. 36 - Prob. 2DQCh. 36 - Prob. 3DQCh. 36 - Prob. 4DQCh. 36 - Prob. 5DQCh. 36 - Prob. 6DQCh. 36 - Prob. 7DQCh. 36 - Prob. 8DQCh. 36 - Prob. 1RQCh. 36 - Prob. 2RQCh. 36 - Prob. 3RQCh. 36 - Prob. 4RQCh. 36 - Prob. 5RQCh. 36 - Prob. 6RQCh. 36 - Prob. 7RQCh. 36 - Prob. 8RQCh. 36 - Prob. 9RQCh. 36 - Prob. 1PCh. 36 - Prob. 2PCh. 36 - Prob. 3PCh. 36 - Prob. 4PCh. 36 - Prob. 5PCh. 36 - Prob. 6PCh. 36 - Prob. 7P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Suppose Country A has a NNP of $480 billion. Income receipts from the rest of the world are $26 billion, income payments to the rest of the world are $10 billion, and depreciation is $45 billion. What is the dollar value of consumption expenditure if it accounts for 68% of GDP? Throughout your calculations, round to one decimal place if necessary. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for surearrow_forwardIfthe value of a nation's imports exceeds the value of its exports,which of the following is NOT true? Ā a.Net exports are negative. Ā b.GDP is less than the sum of consumption, investment, and government purchases. Ā c.Domestic investment is greater than national saving. Ā d.The nation is experiencing a net outflow of capitaarrow_forwardA country has domestic investment of $100 billion. Its citizens purchase $500 of foreign assets and foreign citizens purchase $300 of its assets. What is national saving?Answer1. $600 billion2. $300 billion3. $100 billion4. -$100 billionarrow_forward
- Kindly answer in narrative form. Please cite your sources. Thank you so much!1. What are the GNP and Per capita GNP in Denmark?2. What Type of Currency does Denmark have? and what is the relation to US Currency?arrow_forwardSuppose Country A has the same GDP as Country B, and that neither nationās residents own factors of production used by foreign firms, nor do either nationās firms use factors of production owned by foreign residents. Suppose that relative to Country B, depreciation, indirect business taxes, and personal income taxes in Country A are high, while welfare and Social Security payments to households in Country A are relatively low. Which country has the higher disposable personal income? Why?arrow_forwardA. By what percentage did GDP decline in 2008? B. At that rate, how much output would have been lost in the $14 trillion economy of 2008?$ Ā Billion C. How much income did this represent for each of the 300 million U.S citizens?arrow_forward
- Scenario 1. Assume the following information for an imaginary, closed economy. GDP = $100,000; taxes = $22,000; government purchases = $25,000; national saving = $15,000. Refer to Scenario 1. For this economy, investment amounts toarrow_forward1) Consider a country in which three goods (A, B, and C) are produced. The following table shows data for prices and quantities produced for two years. Ā Quantities produced Unit prices Ā Q1 Q2 P1 P2 Good A 51 45 10 14 Good B 23 54 10 6 Good C 6 12 10 8 Taking year 1 as the base year, what is the growth rate of real GDP between years 1 and 2? Ā Ā a. 0.75% Ā b. 38.75% Ā c. 14.75% Ā d. 375.5% Ā 2) Consider a country in which three goods (A, B, and C) are produced. The following table shows data for prices and quantities produced for two years. Ā Quantities produced Unit prices Ā Q1 Q2 P1 P2 Good A 51 45 10 14 Good B 23 54 10 6 Good C 6 12 10 8 Ā Using year 1 as the base year, what is the value of the GDP deflator between years 1 and 2? Hint: Remember that the GDP deflator is a way of measuring the aggregate change in prices from one period toā¦arrow_forward51) In the absence of technological progress, we know with certainty that an decrease in the saving rate will cause which of the following? A) decrease steady state consumption B) increase steady state consumption C) have no effect on steady state consumption D) decrease steady state consumption only if the decrease in saving exceeds the increase in depreciation E) decrease steady state consumption only if the decrease in saving is less than the decrease in depreciation 52) As an economy adjusts to an decrease in the saving rate, we would expect output per worker A) to decrease at a constant rate and continue decreasing at that rate in the steady state. B) to decrease at a permanently higher rate. C) to increase at a permanently higher rate. D) to return to its original level. E) none of the above 53) Suppose the following situation exists for an economy: Kt+1/N t/N. Given this information, we know that A) saving per worker equals depreciation per workerā¦arrow_forward
- The country of Freedonia has a GDP of $4000,Ā consumption of $1500,Ā and government purchases of $900.Ā What does this situation imply?QuestionĀ 1Ā options:Investment is equal to $1600.Investment plus net capital outflow is equal to $1600.Investment plus net exports is equal to $2400.Saving is equal to $2400. Ā Please give me correct answer with calculation and full explanationĀ otherwise i give multiple downvote Ā Note:- PleaseĀ avoid using ChatGPTĀ and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely andĀ accurate answer. Rest assured, you will receive an upvote if the answer is accurate.arrow_forward16. Which of the following best describes the concept of foreign direct investment (FDI)? A) Investment made by a company or individual in one country in business interests in another country B) Investment made by the government in domestic industries to promote economic growth C) Investment made by individuals in financial markets within their own country D) Investment made by foreign governments in domestic industries to promote economic developmentarrow_forwardQ.1.6 GDP at prices will usually be greater than GDP at prices because of (1) Constant; current; inflation; (2) Current; constant; inflation; (3) Constant; current; depreciation; (4) Current; constant; depreciation.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education