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    Using diagram, show the effect of an increase in foreign income on Real GDP and Price Level. Using graphs, show how each of the following will affect real GDP and the price level in: i) ii) a) b) c) d) e) short-run long run an increase in wage rates an increase in productivity of labour an increase in expected interest rate an increase in government spending.

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    Using diagram, show the effect of an increase in foreign income on Real GDP and Price Level. Using graphs, show how each of the following will affect real GDP and the price level in: i) ii) a) b) c) d) e) short-run long run an increase in wage rates an increase in productivity of labour an increase in expected interest rate an increase in government spending.

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    29 visualizzazioni2 pagine

    Eco 104

    Caricato da

    eiman00
    Using diagram, show the effect of an increase in foreign income on Real GDP and Price Level. Using graphs, show how each of the following will affect real GDP and the price level in: i) ii) a) b) c) d) e) short-run long run an increase in wage rates an increase in productivity of labour an increase in expected interest rate an increase in government spending.

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    Eco104 Section 1 (RsA)

    Assignment 1
    Due: 26th June, Beginning of Class Q1. Using diagram, show the effect of an increase in foreign income on real GDP and price level. Q2. Using diagrams, show: i) ii) Short-run macroeconomic equilibrium Long-run macroeconomic equilibrium

    Q3. Briefly state what is economic growth and how is it measured. Q4. Total household spending is $20,000. Out of this, households spent $5,000 on purchase of secondhand books and $3,000 on financial assets. What adjustments need to be made, if any, to find the value of consumption for GDP calculation? Q5. (You must show your calculations for all answers)
    $ billion 60 5 8 10 7

    Consumption Investment Government Expenditure Imports Exports

    a) What is the current level of national income? b) What is the level of injections? c) What is the level of leakages? Assuming that the economy is in equilibrium, if taxes are $7 billion, how much is the level of savings in this economy? d) How much is budget deficit? e) What is the value of foreign borrowing (foreigners borrowing from us)? f) Show how the figure for investment is obtained. Q7.
    Year 1970 1980 1990 2000 GDP in 1990 dollars (billions) 300 1500 GDP in 2000 dollars (billions) 750 1500 3000 GDP Deflator (1990 = 100) 25 85 100 200

    Taking 1990 as the base year, calculate the missing values.

    Q8. Using graphs, show how each of the following will affect Real GDP and Price Level in: i) ii) a) b) c) d) short-run long run An increase in wage rates An increase in productivity of labour An increase in expected interest rate An increase in government spending

    Q9. Graphically show the effect of the following on Real GDP and the Price level in the short-run: a) An increase in SAS that is greater than the increase in AD b) A decrease in AD that is greater than the increase in SAS c) An increase in SAS that is less than the increase in AD Q10. Using graphs, show how each of the following will affect Real GDP and Price Level in: i) ii) a) b) c) d) e) short-run long run An increase in taxes An increase in rent on land A decrease in expected profit A decrease in the labor force A decrease in arable land

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