Hw1 - Economics 442 Homework 1 Due in class Tuesday January...

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Economics 442 Homework 1 Due: in class Tuesday, January 22 1. National Accounts The following are preliminary figures (in billions of dollars) for 2005 taken from the 2006 Economic Report of the President: GDP = 12479.4 Consumption= 8745.9 Investment = 2099.5 Government Expenditure = 2359.7 Exports = 1299.2 Imports = 2024.9 Government Deficit = -440.4 Use the national income identities to answer the following questions: a. What was the government revenues figure, T, in 2005? Show your work. b. What was the U.S. private savings figure, S, in 2005? Show your work. c. Was private savings sufficient to finance both private business investment and the govern- ment budget? What was the shortfall? Where did U.S. firms and the U.S. government find the extra financing? Can you see the shortfall in the numbers provided at the outset (Hint: think about the current account)? d. Suppose that GNP =12533.1 in 2005. What is the net foreign income receipt, R? What does this figure tell you? (Hint: are foreigners producing more in the US than Americ- ans are producing in foreign countries?) 2. Intertemporal Trade: Current Account and Net Foreign Asset position
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This homework help was uploaded on 04/12/2008 for the course ECON 442 taught by Professor Chari during the Winter '08 term at University of Michigan.

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Hw1 - Economics 442 Homework 1 Due in class Tuesday January...

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