Problem Sheet on BUSINESS ADMINISTRATION

Problem Sheet on BUSINESS ADMINISTRATION - Macroeconomic...

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Macroeconomic Theory and Policy (BM -2011-13) Problem set 1 1. A country grows wheat and grapes and makes bread and wine. Its costs and revenue in 2008 are shown in the table below. Flour Bread Grapes Wine Labor 400 100 200 300 Supplies 100 550 150 200 Profit 50 250 50 350 Sales 550 900 400 850 All flour is used to make bread: the 550 of bread supplies is flour produced that year. Some grapes (200) are used to make wine, and some grapes (200) are sold directly to consumers. a) What is the country GDP’s for 2008? b) Why is GDP measured by the value added method and GDP as a value of final product are not the same for this country? 2. If our exports are $1.2 billion and our imports are $1.7 billion and the government has a budget deficit of $ 3 billion, national savings $6 billion and private investment $4 billion. Is the economy expected to grow in the near future? 3. Toyota (a Japanese firm) buys auto parts in the U.S. in 2006 for $10,000. It spends $12,000 in labor costs in 2007 to build a car in the U.S., using U.S. workers.
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Problem Sheet on BUSINESS ADMINISTRATION - Macroeconomic...

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