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Depreciation 200
Exports 150
public transfer 200
Gross domestic private investment 300
corporate income tax 100
factor receipts from abroad 400
gevenment expenditure on goods and services 250
interest income 800
compensation of employees 2600
net interest on government debit 50
indirect business taxes 100
factor payments to abroad 200
imports 200
proprietors incom(profits) 700
retained corporate profit 200
personal consumption expenditure 4500
personal taxes 100
social security contribution 50
rental income 600. From the above data find personale disposable income.
List four factors in the macro-environment and explain how each of these external forces can influence Volkswagen in any way.
a) Plot a line representing consumer spending and label it C. Also plot a line representing consumer, investment and net exports spending and label it (C+I+Xn). Draw a 45
1. Assume a closed economy and no government. Also assume consumption C=50 + 0.8Yd and investment I=80
a) derive the equation for saving
b) find the equilibrium output
c) what is the implied multiplier
The Cobb- Douglas production function is given by the form Y = ALαKβ
Where, Y = Output (mt/day), L = Labour (hours/mt) K = Capita (Rs/mt). By taking the natural logarithm of each term in the function, that is LnY = LnA+αLnL+βLnK. Using a standard multiple linear regression model the parameters of the function were obtained as follows;
Ln Y = 1.389 +0.8LnL + 0.6LnK
(0.53) (0.02) (0.04)
a. Suppose that businesses buy a total of $170 billion of the four resources (labor, land, capital, and entrepreneurial ability) from households. If households receive $88 billion in wages, $24 billion in rent, and $34 billion in interest, how much are households paid for providing entrepreneurial ability?
describe the type of market structure that Apple belongs to.
a). what is the equilibrium level of income?
b). what is the value of the new multiplier? Why is this less than the multiplier in the earlier problem?
c). what is the value of the budget surplus(BS) when I = 50 ?
d). What is BS when investment increases to 100?
e). Assuming that the full employment level of income Y* = 1200, what is the full employment BS* when I=50?
3. Suppose that a consumer with income of birr 90 wants to spend the whole income on good B and good A. Assume that the goods are consumed on a one-to-one basis and one good is worthless without the other. The price of good A and B are both 3 birrs.
i. How many units of good A&B will the consumer buy?
ii. If the price of good A increases to birr 6, how many he/she buy of each?
iii. What type of preferences does consumption of the two goods represent? What is the shape of the indifference curve for this type of preference?
