SIMON FRASER ECON290 Tut10 answer

SIMON FRASER ECON290 Tut10 answer - Economics 290: Canadian...

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Economics 290: Canadian Microeconomic Policy Tutorial #10 1. Comprehensive Income Wallace the worker had the following cash flow last year. Cash inflow: Labor earnings $50,000, interest income $1,000. Cash outflow: Consumption spending $40,000. Moving expense $2,000 (Wallace accepted a job offer, and moved from east Canada to west). He held some stocks. The value of the stocks at the beginning of last year was $20,000, and it was worth $18,000 at the end the year. (a) Calculate Wallace’s comprehensive income from the sources side. (b) Calculate Wallace’s comprehensive income from the uses side. Sources = earnings + net capital gains – cost of acquiring income Earnings = 50000+1000 = 51000 Net capital gains = -2000 Cost of acquiring income = 2000 Sources = 51000-2000-2000 = 47000 Uses = consumption + increase in net worth – cost of acquiring income Consumption = 40000 Savings = 51000 – 40000 =11000 Increase in net worth = saving + capital gains = 11000 – 2000 = 9000 Uses = 40000+9000-2000= 47000
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This note was uploaded on 04/15/2010 for the course ECON 290 taught by Professor J liu during the Spring '06 term at Simon Fraser.

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SIMON FRASER ECON290 Tut10 answer - Economics 290: Canadian...

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