Question

29. In the small island nation of Carribeau, there are three economic agents. One is a company that does the fishing; second is a restaurant that makes sushi; and lastly there is the government. The fishing company collects 10 tons of fish and sells 8 tons to the restaurant and 2 tons to customers at $3 million per ton, and pays wages of $10 million and taxes of $5 million. The restaurant buys 8 tons of fish as noted before and has $50 million in revenue from selling sushi. The fish is the only cost and they pay $10 million for wages and $10 million for taxes. The government spends all its tax revenue on wages for its employees. Using the expenditure approach, what is the "consumption" of C+I+G+NX and what is the total GDP? a. C $80 million; GDP-$115 million b. C $56 million; GDP-$95 million c. C $80 million; GDP-$95 million d. C $56 million; GDP-$71 million

Answer 1

Q29) option D)

in expenditure method :

Consumption Spending on goods & services , C = 2*3 + 50

= 56

As 2 tons are sold to consumers at $3 million per ton

While 8 tons are sold to restaurant, ( which is not included)

& Restaurants finally sell for $ 50 million

Now GDP = C + G

As I & NX = 0

G = wages & salaries paid by govt

= 10+5 = 15

So GDP = 56+15 = 71

Q30) option D)

Annualised monthly % change=[ ( 9574800/9553800)¹² - 1 ] * 100

= 2.67%

Q31) option C)

now growth rate of real GDP per capita = growth rate of real GDP - growth rate of population

Now growth rate of real GDP = [(31.5-27)/27]*100

= 16.66%

So population growth rate = 16.66-5

= 11.66 %

So in C) growth rate of population = (50-45)/45 = 11.11%