Macroeconomics Answers

Expenditure categories

Million in Birr

1

Personal Consumption Expenditure(C)

4500

2

Gross private domestic investment (I)

850

3

Gov. purchasing of goods and services (G)

1250

4

Export(X)

750

5

Import(M)

1000

6

Net Factor Income received from abroad (NFIRA)

950

7

Net Factor Income paid from abroad (NFIPA)

1050

8

Indirect Business tax (IBT)

450

9

Depreciation(D)

525

Based on Above Information calculate

A, Gross Domestic Product

B, Gross National product

C, Net National Income

D, National Income

E, Trade Balance

Expenditure categories

Million in Birr

Personal Consumption Expenditure(C)

4500

Gross private domestic investment (I)

850

Gov. purchasing of goods and services (G)

1250

Export(X)

750

Import(M)

1000

Net Factor Income received from abroad (NFIRA)

950

Net Factor Income paid from abroad (NFIPA)

1050

Indirect Business tax (IBT)

450

Depreciation(D)

525

Based on Above Information calculate

A, Gross Domestic Product

B, Gross National product

C, Net National Income

D, National Income

E, Trade Balance

Based on Above Information calculate

A, Gross Domestic Product

B, Gross National product

C, Net National Income

D, National Income

E, Trade Balance

 Based on Above Information calculate

A, Gross Domestic Product

B, Gross National product

C, Net National Income

D, National Income

E, Trade Balance

Assume that V is constant, M grows at an annual rate of 5%, Y at a rate of

2% and r= 4%.

a)

What will be the nominal interest rate?

b) How will the nominal interest rate change when the CB increases the

growth rate of money supply by 2 percentage points?

c) Assume that the growth rate of Y drops to 1%.

• How will the inflation rate change?

• What must the CB do to ensure that the inflation rate does not change?

Explain the effect of transfer payments like workers remittances on current account

why would countries having trade surpluses operate on foreign debt?

Explain the role of foreign reserves in the balance of payment account

Discuss the effects of lower taxes in the Keynesian model on the general equilibrium.