suggested_solution_hmk1

suggested_solution_hmk1 - Econ 73-200 Fall 2008 Prof....

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Fall 2008 Prof. Daniele Coen-Pirani Suggested Solution to Problem Set #1 Exercise #1 [25 pts.]. You have been elected the national accountant of a small country (Costa Tepper) in Central America. You have the following list of transactions for the year 2006. The local co/ee shops sold $10000 worth of co/ee to local consumers. To produce the co/ee they purchased $2000 worth of beans from the local co/ee growers. The co/ee growers sold $2000 of co/ee beans to the local co/ee shops and $5000 to Starbucks (a foreign company). The local textile company bought $1000 worth of wool from an Australian company and produced $10000 worth of clothes. Of these clothes 60% were sold to domestic consumers 20% to the government of Costa Tepper and 20% to foreigners. The local textile companies also bought 10 trucks to do their deliveries, each worth $1000, from FIAT (a foreign company). The local bananas producers produced $50000 worth of bananas. $30000 were sold to domestic consumers, and $10000 were sold to Chiquita (a foreign company) and $10000 were sold to a local subsidiary of Dole (a foreign company). The subsidiary produced $20000 worth of canned bananas that were sold to domestic consumers. Dole paid $5000 in wages and repatriated the remaining income. The government raised $2000 from Costa Tepper residents in taxes, paid $1000 in pensions to retired Costa Tepper residents and purchased 1 Dell (a foreign company) computer (worth $1000) to keep track of its records. Finally, 3 Costa Tepper residents got consulting jobs in the US that gave each of them an income of $500. Calculate the following objects for 2006 in Costa Tepper: GDP GNP Private consumption expenditures Investment expenditures Government spending Net exports GDP = C + I + G + NX: Let±s start by computing consumption C : Consumers buy $10,000 worth of co/ee. 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/20/2012 for the course INVESTMENT 101 taught by Professor Unknown during the Spring '08 term at Carnegie Mellon.

Page1 / 7

suggested_solution_hmk1 - Econ 73-200 Fall 2008 Prof....

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online