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Economics
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1. Answer…….$1600
Y= 10000
C= 6000
G=2000
X= 1000
M= 600
I= ?
Y= C+ G+ I+NX
I= Y- (C+G+NX
NX= X-M
= 1000-600
= 400
I= 10000- (6000+2000+400)
=10000-8400
=$1600
2. Answer…..None of the above are correct
Explanation
None of the above answers are correct because we are not given values for the base year
(2000) of which the given variables for the year 2010 would have been valued at, and
thus what we have only goes into calculating the nominal GDP as of 2010.
3. Answer…..136.1
3 pounds of pork and 4 bushels of corn
Cost of the basket of goods in each year:
2008…..(20*3)+ (12*4)= 60+48=$108
2009…..(25*3)+ (18*4)= 75+72= $147

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CPI for 2009 using 2008 as base year= $147/$108* 100
=136.1111
4. Answer…Country A has a higher standard of living but country B will catch up.
Explanation
Country A has a higher standard of living because of the higher capital per worker
(5000/12000) of 0.4 compared to that of country B (8000/24000) that is 0.3. However,
keeping other factors constant, due to catch up effect, country B is expected to catch up
having started as a relatively poor country thus increment of capital stock will have
significant impact on workers’ productivity as opposed to country A.
5. Answer……Only Edgar
Explanation
Only Edgar makes the cut for the employed category because that category includes both
full-time and part-time workers whereas Diane is unemployed because she is waiting to
be recalled back to job of which she has been temporarily laid off.
6. Answer…..12.5 %
Unemployment rate= number of unemployed/labour force
Labor force= number of employed+ number of unemployed
=1400+200
=1600
Unemployment rate of Aridia in 2010= 200/1600*100
=12.5%
7. Answer……Frictional unemployment
8. Answer…….None of the above is correct
9. Answer……..Cash and stock (Both cash and stock can be retrieved at a later age and be
used to purchase goods and services, and in this case cash can include cash at hand and
cash in bank, a reason why some people hoard money because it’s a store of value)

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1. Answer…….$1600 Y= 10000 C= 6000 G=2000 X= 1000 M= 600 I= ? Y= C+ G+ I+NX I= Y- (C+G+NX NX= X-M = 1000-600 = 400 I= 10000- (6000+2000+400) =10000-8400 =$1600 2. Answer…..None of the above are correct Explanation None of the above answers are correct because we are not given values for the base year (2000) of which the given variables for the year 2010 would have been valued at, and thus what we have only goes into calculating the nominal GDP as of 2010. 3. Answer…..136.1 3 pounds of pork and 4 bushels of corn Cost of the basket of goods in each year: 2008…..(20*3)+ (12*4)= 60+48=$108 2009…..(25*3)+ (18*4)= 75+72= $147 CPI for 2009 using 2008 as base year= $147/$108* 100 =136.1111 4. Answer…Country A has a higher standard of living but country B will catch up. Explanation Country A has a higher standard of living because of the higher capital per worker (5000/12000) of 0.4 compared to that of country B (8000/24000) that is 0.3. However, keeping other factors constant, due to catch up effect, country B is expected to catch up having started as a relatively poor country thus increment of capital stock will have significant impact on workers’ productivity as opposed to country A. 5. Answer……Only Edgar Explanation Only Edgar makes the cut for the employed category because that category includes both full-time and part-time workers whereas Diane is unemployed because she is waiting to be recalled back to job of which she has been temporarily laid off. 6 ...
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