Answer to Question #263127 in Macroeconomics for fahmida

Question

1.The following information is presented to you regarding some transactions that have taken place in the year  2021: Description of transactions & Amount in dollars

The garment owner pays a salary to her  workers-$500000

She purchases raw materials to produce  garment products-$400000

She purchases second-hand machinery  from markets to produce garment  products-$600000

She sells RMG products to the domestic market-$450000

She sells RMG products to the international market-$678000

She accumulates unsold products in her  warehouse-$100,000

a)Based on the information provided, calculate contribution to the GDP for the aforementioned transactions  (using the expenditure approach). Also, specify the components in which the transaction items will go.

2.Explain how structural unemployment can be addressed by policy changes.

Answer 1

(1)

$GDP= Consumption+Investment+Government Expenditure+Net Exports.$

$=(450000+500000)+(400000+600000+100,000)+(678,000)$

=$ 2,050,000.

consumption:

• Sale of products to domestic market.
• Payment of salaries to workers.

Investment:

• Purchase of raw material.
• Purchase of second hand machinery.
• Accumulation of unsold products.

Exports:

• Sale of products to international market.

(2)

By using supply side policies, structural unemployment can be reduced through offering of better education and training. This helps in the provision of skills that will ensure those who are long term unemployed, retrain and get jobs in a fast changing labour market.