If C is consumption, I is investment, G is government purchases and NX is net exports, according to the expenditure approach, Y would stand for and the national income identity could be written as Select one: OA. GDP; Y-C-I=G+ NX OB. CPI; Y=C+I+G+NX OC. the real interest rate; Y=C+I+G+ NX OD. income; Y=C-1-G+NX E transfers; Y=C+I+G-NX

Consider an economy that produces wood, boats, and has a marketing agency. This year domestic wood production generates revenues of $80. Of this $80 worth of wood, $40 were purchased by the boat producer and $40 were sold abroad to a foreign company. The wood producer paid $40 worth of wages and $10 worth of taxes. The boat producer combines the services of the marketing agency, the wood it purchased from the wood producer, and $20 worth of labor (wages) to produce $120 worth of boats. Its revenues, which include a boat produced in the previous year and that was carried as inventory, are $130. Domestic families buy all these boats. This company pays $10 worth of taxes. The marketing agency, whose sole client is the boat company, generates a revenue of $40 which is enough to cover its labor costs of $40. This company pays no taxes. The government in this economy uses the $20 worth of taxes and builds a port. The cost of the port is $40 that are paid to workers. This port is partially…

Consider the national income model:Y = C + I0 + G0 + (X0 − M) … … . . … . (1)C = a + byd, (a > 0,0 < b < 1) … … . (2)Yd = Y − T … … … … … … … … … … … . . . (3)T = T0 + ty … … … … … … … … … … … . . (4)M = M0 + my … … … … … … … … … … . . (5)Where: (T) = taxes, (t) = income tax rateIdentify: 4/ Behavioral equations.5/ Definitional equation.6/ Constants., give the Economic meaning of them.7/ Coefficients. give the Economic meaning of them.

A price index is Multiple Choice the cost of a market basket of goods and services in a base period divided by the cost of the same market basket in another period. a ratio of real GDP to nominal GDP. a comparison of real GDP in one period relative to another. a comparison of the current price of a market basket to a fixed point of reference.

Use the table to find GDI, GDP, gross private domestic investment, personal income, and personal disposable income. (All amounts in trillions of dollars.) Profit Indirect business taxes Rent Interest Wages Depreciation Consumption Government spending Imports Social Security contributions Exports Government transfer payments Personal income taxes and nontax payments Corporate taxes and retained earnings 2.8 .8 .7 .8 8.2 1.3 11.0 1.8 1.7 2.0 1.5 2.0 1.7 .5

QUESTION 2 NATIONAL INCOME DATA (in current prices) 1992 III Personal consumption expenditures Gross private domestic investment Government purchases of goods and services 02. Based on this table, the Net Domestic Product is $ Exports Imports Capital consumption allowance (depreciation) Source: Survey of Current Business, Vol. 72, Number 10, (October 1992), p. 8, 10 QUESTION 3 billion. NATIONAL INCOME DATA (in current prices) 1992 III Personal consumption expenditures Gross private domestic investment Government purchases of goods and services 03. Based on this table, the Net Exports figure is $ (in billions of dollars) 4,105.0 776.9 1,122.5 626.8 664.2 697.3 billion. (in billions of dollars) Exports Imports Capital consumption allowance (depreciation) Source: Survey of Current Business, Vol. 72, Number 10, (October 1992), p. 8, 10 4,105.0 776.9 1,122.5 626.8 664.2 697.3