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You are given the following information about an economy: Gross private domestic investment 50 Government purchases of goods and services 35 Gross national product (GNP) 300 Current account balance10 Taxes 60 Government transfer payments to the domestic private sector 30 Interest payments from the government to the domestic private sector10 (Assume all interest payments by the government go to domestic households.) Factor income received from rest of world 6 Factor payments made to rest of world8 Assuming that government investment is zero, find each of the following. Net factor payments from abroad GDP Net exports Consumption Private saving Government saving- National saving

2Consider an economy that produces only three types of fruit: apples bananas, and oranges. In the base year (a few years ago), the production and price data are listed in the tables to the right. Base Year Quantity Fruit Apples Bananas 5,000 bunches Oranges Price 3,000 bags In the base year, nominal GUP was s In the current year, nominal GDP is $ (Round both answers to the nearest whole number.) $2 per bag $3 per bunch $5 per bag 6,000 bags The percentage increase in nominal GDP since the base year is 1 % (Enter your response as a percentage rounded to one decimal place.) Current Year Quantity Fruit Apples Bananas 13,000 bunches Oranges Price 4,000 bags In the base year, real GDP was $ In the current year, real GDP is (Round both answers to the nearest whole number.) $3 per bag $2 per bunch $7 per bag 24,000 bags The percentage increase in real GDP since the base year is | |%. (Enter your response as a percentage rounded to one decimal place.) The GDP deflator for the base year is The GDP deflator for the current year is (Round both answers to one decimal place.) The inflation rate (which equals the percentage increase in the GDP deflator) since the base year is 1 %. Enter your response as a percentage rounded to one decimal place.) The percentage increase in nominal GDP in this economy since the base year is due primarily to3

Hy Marks buys a one-year government bond on January 1, 2015, for $500. He receives principal plus interest totaling $525 on January 1, 2016. Suppose that the CPl is 200 on January 1, 2015, and 202.0 on January 1, 2016. This increase in prices is different than Hy had anticipated; his guess was that the CPI would be at 201.0 by the beginning of 2016. The nominal interest rate is .% (Round your answer in percentage points to one decimal place.) The actual inflation rate is %. Round your answer in percentage points to one decimal place. The real interest rate is%. (Round your answer in percentage points to one decimal place.) Hys expected inflation rate was %. (Round your answer in percentage points to one decimal place.) Hys expected real interest rate was 1%. (Round your answer in percentage points to one decimal place.)

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Answer #1

Solution: The government saving in normal cases is negative. The difference between GDP and GNP lies incorporation of net factor income from abroad. GNP has it. Current account balance is also net export.

In government saving calculation, interest payment to domestic private sector by the government has also been deducted.

Answering first four parts is as per HOMEWORKLIB RULES.

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