Today, the typical American works fewer than 40 hours per week. For example, in 2011, the money supply was $240, the price of a cell phone was $7.20, and the economy produced 500 cell phones. GNP considers production that occurs outside the U.S. Consider a simple economy that produces only cell phones. -When income is $11,000, consumption spending is $7,300. Consider the following simple model of an economy: C = 1,000 + .85(Yd) I = 780 - 800r G = 1,000 T = -50 + 0.09(Y) IM = 100 + 0.1(Y) EX = 100 + 0.1(Y_f) Assume Foreign Income = 10,000 r* = 11% What is the amount of the government budget deficit/sur, Consider a commodity money model described in the class but with the following features: There are 100 identical people in every generation. B. The marginal product of oranges in plant 1 is MP1 = 1,000 - 01 and in-plant 2 is MP2 = 1,200 - 202. Fill in the missing values in the. 4. Further, assume th, Suppose that the table below shows an economy's relationship between real output and the inputs needed to produce that output: Input Quantity Real GDP 300.00 $400 225.00 300 150.00 200 a. See answer Advertisement topeadeniran2 Last year, she purchased $7,000 worth of scrap metal. GDP Example Problems Flashcards | Quizlet Refer to the table. Real GDP = 137.5 x 1 + 1350 x 30 = 40637.5, Billions of dollars Draw a graph of aggregate demand and aggregate supply to illustrate the current situation. b. Numerically. The marginal propensity to consume for this economy is: a. It can produce two goods, apples and bananas. Suppose the base year is 2001. They have a total of 2000 crates of oranges. A break-even level of production. What are the equilibrium levels of: a. GDP? The production function is: f(K,L) = K^1/3 L^1/3. GDP is not adjusted for crime or other social problems. The following table contains information on the economy's money supply, velocity of money, price level, and output. Suppose an economy producers three goods: Apples, oranges, and bananas. d. provide minimum incomes for, Consider the following changes in the economy. (Assume that the change in fair value results from a change in market interest rates rather than a change in instrument-specific credit risk.). Draw the short run Phillips curve and relate it to our economy today. In the short run, the firm has 16 units of capital. Consider a simple economy that produces two goods: pencils and muffins. Fill in the missing values in the following table, selecting the answers closest to the values you calculate. a. Suppose you have the following disposable income and consumption data for an economy, as shown in the table below. Derive the short run, Economic theory suggests that as plant size increases, the average cost of production should fall. In this economy, the level of income at which the consumer breaks even (cons. The country has a constant technology, population and capital stock (in other words, real GDP is constant throughout). Looking at GDP data from the United States from 2001 to the present, what would be true of the relationship between nominal GDP and real GDP? The firms production function is : f(k, l) = k1/3L1/2 The rental cost of Captain is 1$/unit and, 1. A) an inefficiently small amount B) an efficient amount C) an inefficiently large amount D) none, Suppose you are the owner of a small factory which produces tables and chairs. For example, in 2017, the money supply was $200, the price of a pen was $5.00, and the economy produced 400 pens. Each sector employs capital and labor and its production function exhibits constant returns to scale and, The table below shows how the average cost of production for airplanes at a certain factory changes as the number of airplanes built at that factory increases. Round to 2 decimal places. 1.44% Quantity of Money (Dollars) Price Level (Dollars) Quantity of Output (Cell phones) Nominal GDP (Dollars) ve 2.44% Year Money 500 2017 240 7.20 5% 500 2018 252 105% The money supply grew at a rate of from 2017 to 2018. Fixed cost is FC = 500 (sunk cost). Consider the following Economy: Only Coconuts are produced, using labor Year 1 Coconut Producer Total Revenue $20 Wages $5 Taxes $1.5 Interest on Loan $0.5 (a) What is the Coconut Producer. \hline \text { Race and Sex } & \mathbf{1 - 1 4} & \mathbf{1 5 - 2 4} & \mathbf{2 5 - 6 4} & \text { over 64 } & \text { TOTALS } \\ Chapter 30 Flashcards | Quizlet A. Textbooks 15 90 20 100, Real GDP in 2009 equals $6680. The velocity of money remained the same at 15. b. Draw the short run Phillips curve and relate it to our economy today. At the equilibrium real wage RW0, the country's labor force works L0 hours and produc, Consider an economy described as follows: a. Compute private saving, public saving, and national saving. Few foreign firms maintain facilities in the U.S. while many U.S. firms are currently operating abroad. Velocity and the quantity equation Consider a simple economy that produces only pens. Right now, the firm has 10 units of K, w = 3, and r = 10. If year 1 is the base year, the value for this econ, Suppose the economy produces only 2 goods: consumer goods and capital goods(K). All rights reserved. The marginal product of labor is \frac{10}{E^{0.50. Fill in the missing values. In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption function is: C=100+0.75Y. Labor is employe, Assume a desert island economy in which labor is the only scarce resource and labor can be used to gather food (coconuts) or to build huts. For example, in 2011, the money supply was $280, the price of a cell phone was $7.00, and the economy produced 600 cell phones. We will let suicide victims be our population. For example, in 2012, the money supply was $360, the price of a cell phone was $4.50, and the economy produced 800 cell phones. a) The GDP of this country would be $ million. Consider an economy has the following information 1. Suppose that the table below shows an economy's relationship between real output and the inputs needed to produce that output: Consider the following data. Decreasing, Chapter 30 Post-Class Assignment Part II: Mon, SS Persia, Greece, Rome multiple choice test, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, David R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams, Unit 5: Civil War & Reconstruction Study Guide. U.S. The following table contains information on the economy's money supply, velocity of money, price level, and output. Suppose GDP in this country is $1,175 million. If the price per unit of the good is $1.9 and labor costs $10 per unit. \hspace{17pt}\text{Adj.} If the price of labor, w = $12 per unit of labor, what is the firm's marginal cost of production when the firm is producing 48 units of output? ), An economy produces two goods, A and B; has two factors of production, K and L, and production of good A is capital-intensive, and the production of good B is labor-intensive. For. What is t, Both Kate and John own saltwater taffy factories. He is paid in cash twice per month. For example, is aluminum used to produce a new mountain bike included in GDP? Aggregate supply describes a relationship between? For a given output level, a firm's short-run average product of labor is 4 while its marginal product of labor is 5. What is the optimal labor demand in the short run? D. all of the above, Consider the following short run production function. Production Combin, Consider the following information describing an economy with demand-determined output. a) What is the price level and money supply? Assume the market pr, Consider the case of Thailand, a small open economy that faces constant goods prices. National income will Incorrect: The largest component of gross domestic income is wages, which are about three times as large as profit. Fill in the missing values in the following . Question: Velocity and the quantity equation Consider a simple economy that produces only cell phones. Currently U.S. is producing 150 cloth and 50 machines. Received an $18,000 cash advance for a contract to provide services in the future. _______ per year. C. the relationship between the, Consider an economy described by the following equations: Y=C+I+G+NX; Y=5000; G=1000; T=1000; C=250+0.75*(Y-T); I= 1000-50r; NX= 500-500*e; r=r*=5. copyright 2003-2023 Homework.Study.com. d. The adjustment to fair value on December 31, 2018, assuming that Eskew, Inc., elected to use the fair value option. (a) Graph the short-run total product curve. What is the level of productivity? a) The GDP of this country would be $150 million. Nominal GDP can increase if output falls and prices rise. 2009 Q x 2000 P = Value \hline \text { black, male } & 10 & 460 & 1,060 & & 1,670 \\ Draw a graph of the money market to illustrate the effect of the Fed purchases government, Consider the following information describing a closed economy with no government and where aggregate output is demand determined 1. the equilibrium condition is Y = C + I 2. the marginal propensity, Refer to the table above, Consider a simple economy with two countries, the United States and India. Decreasing C. Whe, Suppose that a firm has a production function given by: q= 10 L^{0.4}K^{0.6}. John's factory has high fixed costs and low variable costs. Would the difference between the real GDP per capita in 1890 and the real GDP per capita today understate or overstate the difference in the population's economic well-being? Ety of Money Price Level (Dollars) Nominal GDP (Dollars) Quantity of Output (Cell phones) 500 5 entirely 7.20 15 from 2017 to 2018. When the pric, Suppose an economy is characterized by the Solow model. \\ In the U.S., gross domestic product (GDP ) and gross national product (GNP) are close in value. Find a new equilibrium. TotalAssetsStockholdersEquityEvent/Cash+Other=Liabilities+Common+RetainedAdjustmentAssetsStockEarningsa-6,000+6,000NANANAAdj.NA-4,500NANA-4,500. GNP $13,300 Production and Prices in Year 2 This means that if we reduce labor by one in oranges, we need one more unit of land, Suppose the production function is y = 2K^{0.5}L^{0.5} and in the short-run K is fixed at K = 16. An artist buys scrap metal from a local steel mill as a raw material for her sculptures. Experts are tested by Chegg as specialists in their subject area. These sweaters are made using a combination of labor and knitting machines. remain the same In the short-run, the level of capital is fixed. When the number of people working outside the home decreases, the measured level of GDP, Valueperiod 2 Valueperiod 1 / Valueperiod 1100. Velocity and the quantity equation Consider a simple economy that produces only cell phones. The following table contains information on the economy's money supply, velocity of money, price level, and output. GDP is not adjusted for pollution and it does not account for unequal income distribution. Since cell phone output did not change from 2017 to 2018 and the velocity of money the change in the money supply was reflected In changes in the price level. If the consumer s money income is 20, the a) consumer can obtain a combination of 5 units of both C and D, b) price of C is 4 and the price of D is 2, c) price of C is 2 and the price of D is 4, d) pri, Assume a technological advance leads to lower production costs. explain why real domestic output and the price level are directly related. Suppose a production function is q = K^(1/2)L^(1/3) and in the short run capital (K) is fixed at 100. Corporate earnings 1,250 The Nominal GDP for the year 2015 is $7450. "If a recession is so severe that the price level declines, then we know that both real GDP and nominal GDP must decline." Which of the following do we subtract from GDP to obtain national income? The following table contains information on the economy's money supply, velocity of money, price level, and output. Consider a simple economy that produces only croquettes. b) the size of its factories. c. costs and revenue. The value of the aluminum is not directly counted in GDP, but the production of aluminum is included in the value-added method of measuring GDP, Indicate whether each of the following transactions represents the purchase of a final good. CH 17 Flashcards | Quizlet Chapter 30 Post-Class Assignment Part II: Money Growth and - Quizlet Consider a simple economy that produces only pies. The following table copyright 2003-2023 Homework.Study.com. Gross National Product (GNP) differs from U.S. Select all that apply. Further, assume that all of the cotton is used in the production of shirts. Solved Consider a simple economy that produces only cell - Chegg What are consumer goods? Show the math work a.) Show how the event and its related adjusting entry affect the accounting equation. Under a perpetual inventory system, acquisition of merchandise for resale is debited to: The event requires a year-end adjusting entry. Answered: Velocity and the quantity equation | bartleby Currency: $1,000 Checking Account Balances: $2,000 Savings Account Balances: $5,000 Small-Denomination T. Define Economy and list all inputs and outputs need 100 words at least. The following table contains information on the economy's money supply, velocity of money, price level, and output. Fill in the missing values in the following . Assume that the economy is initially at point Y in the graph. Draw a production possibility curve (PPC). Not copy pasted answer from google. "If real GDP stayed the same while nominal GDP declined between 2008 and 2009, then the GDP deflator must also have declined.". Show more Business Economics Answer & Explanation Solved by verified expert Define the term information technology. b. All other trademarks and copyrights are the property of their respective owners.