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Unformatted text preview: Macroeconomics 1. Master APE. 2010-2011. Problem set 1 Prof. Xavier Ragot / T.A : Eric Monnet PS1 : National accounts and the current account 1 Questions Provide detailed answers to the following simple questions, using what you have learnt in class. a)Identify the following transactions within the main elements of expenditure : consumption, investment, government expenses, net exports. i.Boeing sells an aircraft to the US Air Force. ii.Boeing sells an aircraft to the French Air Force. iii. Airbus sells an aircraft to Air France. iv.Boeing sells an aircraft to Bill Gates. v. Airbus builds an aircraft which will be sold next year. vi. Airbus increases Mr. X 's salary. Mr. X purchases a car. vii. Airbus purchases a car to be used by Mr. X . viii. Due to a big recession, one third of the whole output of an economy is not sold this year. b) Consider the following identities: Y ≡ C + I + G + X- M Y ≡ Y D + ( T- TR ) Y ≡ C + S + ( T- TR ) where C = consumption, I = investment, G = government expenditures, X- M = net exports, Y D = disposable income, TR = transfers, S = savings, T = taxes. Derive the following expression and interpret: S- I ≡ ( G + TR- T ) + ( X- M ) Do these identities shed light on countries' macroeconomic situation you may know ? c)Does the price of bonds increase when the interest rates rise ?...
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This note was uploaded on 01/12/2011 for the course ECO 010023 taught by Professor Mrraggillpol during the Fall '09 term at Paris Tech.
- Fall '09