Economics Answers

The Nottinghamshire Research Observatory in England calculated that students who attend Nottingham Technical University spend about £2,760 each in the local economy for a total of £50.45 million. In total, the impact of their spending on the local economy is £63 million. Calculate the size of the student spending multiplier.

You are given the data below for 2008 for the imaginary country of Amagre, whose currency is the G.

Consumption 350 billion G

Transfer payments 100 billion G

Investment 100 billion G

Government purchases 200 billion G

Exports 50 billion G

Imports 150 billion G

Bond purchases 200 billion G

Earnings on foreign investments 75 billion G

Foreign earnings on Amagre investment 25 billion G

Compute net foreign investment.

Compute net exports.

Compute GDP.

Compute GNP.

How does the four external factors influence Volkswagen?

“Assume the world economy has only two countries, Utopia and Nirvana, each of which

produces two products, milk and honey. Suppose that Utopia can produce 12 bottles of milk or

10 bottles of honey per hour, and Nirvana can produce 4 bottles of milk or 6 bottles of honey

per hour.”

Do you agree that Utopia has both the absolute and comparative advantages over milk and

honey? Justify your answer with appropriate analysis.