PS1 - ECON1312, Section 3 and 4 01/23/08 Problem Set 1 Due...

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ECON1312, Section 3 and 4 01/23/08 Problem Set 1 Due Tuesday 01/29/08 NOTE: You have the option to work in groups of up to three people and hand in one problem set per group. Question 1 For the following transactions determine which component/s of GDP (C, I, G, NX) is/are going to be affected and whether current GDP will rise or fall: a) You buy a car that was produced in Japan. b) You buy a new house. c) The national defense budget is cut by $20 billion. d) Microsoft sells $50 million worth of computers from its inventories (the stock of computers that they keep in their warehouse). e) You purchase Hungarian hazelnuts to bake a plate of cookie for the macro study group. f) The Pentagon buys flour to bake cookies for the soldiers. Question 2 a) Complete the following table (2 points): Year 1 Year 2 Gross domestic Product 4804 Consumption 3320 3544 Investment 629 673 Government purchases 977 Net exports -58 -54 b) Do government purchases include government spending on unemployment checks? Why or why not?
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PS1 - ECON1312, Section 3 and 4 01/23/08 Problem Set 1 Due...

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