# chp 2 Numerical problem answers - C- income approach - \$1...

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Chapter 2: C 1. GDP = 1000 fish (worth) , C = 850, I = 150 (50 due to increased inventory plus 100 used to increase future output), P’s income = 800, G’s income=200 = 2. a) Y and C up by \$6 b) C and M up by \$6 2 c) Y and I up by \$6 d) I and M up by \$6 a 3. a) product approach - \$3.8 million by XYZ (ABC only produces intermediate goods) b expenditure approach - again, \$3 million for 3 sold computers plus \$0.8 million implicitly purchased by XYZ and held as inventory. p income approach - ABC XYZ X Labor 1.0 0.8 Profit 0.7 0.6 Taxes 0.2 0.4 T Interest 0.1 0.0 Total=3.8 b) GDP is now only \$3.3 million, so……. o 4. a) \$1 - product approach - sold for \$14, but \$13 of it was actually last years product \$ - expenditure approach - \$14 Consumption plus \$13 negative I (inventory drops)
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Unformatted text preview: C- income approach - \$1 to factors of production in gas station (wages, taxes, profits…) \$ b) \$60,000 - product approach - broker’s fee \$- expenditure approach - residential investment by home buyer r- income approach - income to broker for wages, taxes…. . b c) \$28,000 …. d) \$100 million … c e) \$0……… (transfer, not a payment) \$ f) \$5,000 g) \$120 million… f 5. C=150, NX= -18, GDP = 202, NFP= -2, Spvt=30, Sgovt= -10, S = 20 C 6. a) GDPn: \$56,000 and \$200,000 a GDPr: \$56,000 and \$178,000 G b) 257% c) 218% 2 d) GDPdef : 12.4% CPI: 8.9% d 7. -2.5% -8.8% -10.3% -5.1% 8. i n = 9%, p =7%, so r=2% p (expected)=5%, so r(expected)=4% = 9. a) 10% b) 10% c) …...
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## This note was uploaded on 04/20/2008 for the course ECON 332 taught by Professor Elwood during the Fall '07 term at James Madison University.

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