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- What are typical GDP patterns for a high-income economy like the United States in the long run and the short run?When a business buys a new computer to design its product, this spending is called? A. Goverment expenditure B. Investment C. Consumption D. ExportWhat is the biggest spending component of GDP?
- If GDPMP of a country is 50 billion and product taxes are 2 billion while subsidies given are worth of 1 billion. What is GDP at factor cost ?1. What relationship does the income expenditure model represent? Why is it used?Which of the following are counted in this year’sGDP? Explain your answer in each case.a. Flashy Car Company sold a used car.b. Juanita Jones cooked meals for her family.c. IBM paid interest on its bonds.d. José Suarez purchased 100 shares of Microsoftstock.e. Bob Smith received a welfare payment.f. Carriage Realty earned a brokerage commissionfor selling a previously owned house.g. The government makes interest payments topersons holding government bonds.h. Air and water pollution increase.i. Gambling is legalized in all states.j. A retired worker receives a Social Securitypayment.
- Government purchases of goods and services $150 Government borrowing $60 Government Taxes = $100 Government transfers = $10 %3D Private savings = $200 %3D Consumer Wages, profit, interest, rent = $800 Households spending = $510 Markets for goods and services Factor Financial markets markets Gross Wages, profit, interest, rent = $800 domestic Borrowing and stock issues by firms = $110 product %3D %3D Firms Investment spending = $110 %3D Foreign borrowing and sales of stock = $130 Exports = $50 %3D Rest of world Foreign lending and purchases of stock = $100 Imports = $20 %3DA4 Government wants to boost the economy after the pandemic crisis. They decide to reduce the income tax on wage earners from 10% to 8%. How does a decrease in income tax affect the labor market and potential GDP?Answer the questions below for the economy of Motak using the graph below. Government spending / net taxes 800 700 600 500 400 300 200 100 0 G₂ The Economy of Motak 200 400 600 800 1000 1200 1400 1600 Real GDP NTR G1 Tools / G2 i
- From the expenditures approach, list and explain the components of GDP ? Example?Increase in tax by the government: a. None of these b. Decreases the consumption by individuals c. Increases the saving by individuals d. Increases the consumption by individualsQuestion # 6 Based on the following data for a hypothetical economy Millions Wage and salaries Government Purchases Exports Rental Income Profit Interest Consumption and spending Imports Private investment Spending $6000 $2000 $2650 $450 $1600 $1000 $4800 $2400 $2000 a. Calculate the GDP using expenditure approach: b. Calculate the GDP using income approach: c. Suppose that in the next vear export deerease to 1650 million. Import increase to 3400 million and consumption falls to 2800 million. What will the GDP be in that year?