Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

problem 1: GDP

a) State concisely, in your own words, the essence:

i) Of what GDP measures and
ii) What GDP doesn’t measure?

b) Stocks and bonds issued by firms comprise the ‘Investment’ component of GDP.

i) True or False?
ii) Briefly describe why.

c) It is pretty much a given, through time and across countries, that Consumption accounts for about 70% of GDP.

i) True or False?
ii) Briefly describe why.

d) A March 2012 article in the WSJ observed, ‘It was the first increase [in household debt] as the second quarter of 2008, before Lehman Brothers’ collapse and the ensuing financial panic and recession. As then, Americans have focused on decreasing their debt. That procedure strengthens an economy in the long run however crimps short-term growth.

{Excerpt from Neil Shah, “Consumers Shape Up Their Finances,” The Wall Street Journal, March 9, 2012, pA2.}

How does that work … those households reducing debt strengthens an economy in the long run but “crimps” it in the short term?

e) If you only get to know either the nominal or real GDP growth rate of an economy,

i) Which would you select? 
ii) Why?

f) Briefly describe whether you

i) Agree or disagree with the following statements and
ii) Why?

• “If nominal GDP is less than real GDP, then the price level must have fallen during the year.”
• “Whenever real GDP declines, nominal GDP must also decline.”
• “If a recession is so severe that the price level declines, then we know that both real GDP and nominal GDP must decline.”
• “Nominal GDP declined between 2008 and 2009, therefore the GDP deflator must also have declined.”

g) An artist buys scrap metal from a local steel mill as a raw material for her metal sculptures. Last year, she bought $5,000 worth of the scrap metal. Throughout the year, she produced 10 metal sculptures which she sold for $800 each to a local art store. The local art store sold all of the sculptures to local art collectors, at an average price of $1,000 each.

For the 10 metal sculptures,

i) What was the total value added of the artist, and
ii) What was the total value added of the local art store (Show work and describe each point)?

problem 2: Economic Growth

a) Referring to the table below and by using the Rule of 70, comment on long-term changes in the standard of living in the United States?

661_Economic growth.jpg

b) Would you rather live in the United States of 1900 with an annual income of $1million or in the United States of 2012 with an annual income of $50,000? (Both incomes are begun in 2012 dollars).

Briefly show and describe why?

c) Increases in real GDP per capita depend on increases in labor productivity. What drives labor productivity?

d) In developed economies, economic growth depends more on technological change than on increases in capital per hour worked. What drives technological change?

e) Briefly, what crucial role can/should government play to foster the long-term economic growth?

f) An economy – by definition – is always operating at potential GDP.

i) True or False?
ii) Briefly describe why?

g) In a closed economy, or in an economy where net exports are zero (NX = 0), total Savings should equal total Investment (S = I).

i) True or False? 
ii) Why?

h) If the government runs a balanced budget, where does all of S (National Savings), come from?

i) The article quoted from in problem 1d referred to a general de-levering of the U.S. household. It follows, then, that the US economy as a whole must be de-levering. True or False? Why?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91340

Have any Question? 


Related Questions in Microeconomics

Question 1which of the following levels of supply chain

Question 1 Which of the following levels of supply chain information systems is most likely to provide the firm with a competitive advantage? A.Strategic planning B.Decision analysis C.Management control D.Transaction sy ...

Assignmentvisit wwwlovemarkscom and share your thoughts on

Assignment Visit www.lovemarks.com and share your thoughts on Branding and Pricing as it relates.....to "The Future Beyond Brands." Check out the Love/Respect Axis and see just where your favorite brand is sitting. (lmnu ...

Short paperthus far in the course the primary focus has

Short Paper Thus far in the course, the primary focus has been on hospitals within the healthcare industry. For this short paper you will consider the economic issues related to long-term care facilities. In this assignm ...

Question 1 - read the following passage carefully and

Question 1 - Read the following passage carefully and answer questions The beverages industries in which Pepsi operate are highly competitive. They compete with major international beverage companies in multiple geograph ...

Assignmentscenario summarya kansas city based supplier of

Assignment Scenario Summary A Kansas City based supplier of health care information technology (HCIT) solutions has recently hired you as a Human Resource Manager. You are in charge of hiring new medical consultants for ...

Assignmentwrite a 5-6 page paper on one of the following

Assignment Write a 5-6 page paper on ONE of the following topics. Advice: Read the question you choose very carefully, and make sure you are answering it. What you write must be clearly relevant to answering the question ...

Assignmentthe paper is on googles business ethics in the

Assignment The paper is on Google's Business Ethics in the area of Sustainability. How does Google contribute or detract from various aspects of sustainability? Sustainable businesses make products and services which fil ...

Assignment sustainability at top shelf shoesin this course

Assignment: Sustainability at Top Shelf Shoes In this course, you will work independently to analyze sustainability issues for a hypothetical organization. The assignments follow one another so that you can apply the met ...

Economic choice and economic decision makingconsider your

ECONOMIC CHOICE AND ECONOMIC DECISION MAKING Consider your last vehicle purchase and the decision making process you engaged in while deciding what vehicle to purchase or if a new vehicle was the right decision. While an ...

Leasing equipmentfor catherine owens onlybullsuggest one

Leasing Equipment For Catherine Owens Only • Suggest one key economic factor that motivates leasing as an option in acquiring an asset. Explain the potential asymmetries that may exist where leasing may be beneficial to ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro