ECON105week1questions - QUESTION 2 Consider an economy that...

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QUESTION 1 The strawberry farmer picks strawberries and sells $400 of strawberries to domestic consumers and $1000 of strawberries to the ice-cream factory. The milk factory sells $300 of milk to domestic consumers and $800 of milk to the ice-cream factory. The ice-cream factory uses strawberries and milk to make ice-cream and sells $2000 of ice-cream to domestic consumers and $500 of ice-cream to another country. Finally, the domestic government buys $1500 of phones from another country. (a) Find the GDP of this economy by value-added. (b) Show how you get the same GDP if you measure it by expenditure.
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Unformatted text preview: QUESTION 2 Consider an economy that produces only four goods (A, B, C, D). The prices and quantities of each good for three years is given below in the table. Let year 2 be the base year. goods prices 1 quantities 1 prices 2 quantities 2 prices 3 quantities 3 A 2 5 4 6 4 4 B 1 2 2 1 3 1 C 3 4 2 8 3 7 D 8 2 9 2 10 2 (a) Is this economy really getting bigger? (b) Calculate the inflation rate between year 1 and year 3. ECON105 week 1 questions Eldar Sehic SFU 2010-1...
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This note was uploaded on 07/13/2010 for the course WFSC XDVBCX taught by Professor Sgfdb during the Spring '10 term at Simon Fraser.

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