the informal sector is ignored governments when calculating GDP. explain why this is likely to cause a more significant undervaluing of GDP in an LDC compared to a DC, and illustrate the impact of a lack of tax revenue and consequent lower government spending on an AD/AS diagram.
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the informal sector is ignored governments when calculating GDP. explain why this is likely to cause a more significant undervaluing of GDP in an LDC compared to a DC, and illustrate the impact of a lack of tax revenue and consequent lower government spending on an AD/AS diagram.
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- Considering the recent expenditure of governments across the world in providing vaccines free of cost to their respective citizens, we assume that government is facing a temporary budget deficit. Based on these circumstances and the additional difficulties due to the ongoing pandemic, please answer each of the following questions related to the country you have or will be speaking about during your presentation. Please write the equation for GDP to reflect a possible budget deficit. Now, based on the above situation, explain in your own words, how will the government for the country of your choice expect to address the situation or has already planned to reduce the budget deficit. Assume you are an investor in your country, how will the choice for investment change due to the expectation of government policy in your response for part (a) above? Explain with the help of a diagram as you feel appropriate. Assume the labor demand has been affected due to the pandemic and as per your…Malaysia GDP to rebound up to 7.5% in 2021, central bank predicts The Malaysian economy is expected to grow between 6% and 7.5% this year, the central bank said on Wednesday, with COVID-19 vaccinations and stronger external demand driving a recovery from the 5.6% contraction for 2020. Central bank Governor Nor Shamsiah Yunus said growth this year would also be underpinned by higher private and public expenditures, while an accelerating immunization campaign will improve confidence. "The Malaysian economy is projected to rebound in 2021, with the gross domestic product achieving pre-COVID-19 levels by mid-2021,". The new full-year estimate leaves slightly more room at the low end, compared with a previous forecast of 6.5% to 7.5% expansion. "In our forecast, we assume that herd immunity will only be achieved in the first quarter of 2022," Nor Shamsiah explained. She also said the bank considered that Malaysia's international borders could remain largely closed for the entire year, but…Businesses in the nation of Islandia have been accumulating cash because they have a pessimistic outlook of the national economy. Recent changes in the economic outlook of Islandia have caused business leaders to begin to invest some of their accumulated cash. Suppose that businesses in the country invest a total of $40 billion of this cash. Instructions: Enter a positive number to show an increase and a negative number to show a decrease. a. What would be the maximum expected change in GDP if Islandia's marginal propensity to consume (MPC) is 0.75? $ billion b. Suppose that the recent economic outlook in the country of Mountainia has been the opposite. Businesses have postponed planned investments and have begun to accumulate cash. If businesses in Mountainia postpone $12 billion of their planned investments, what would be the maximum expected change in GDP if its marginal propensity to save (MPS) is 0.05? $ billion
- Q3 In a simple macroeconomic model, the value of national income Y may be found by solving the system: G= 250 (government expenditure) T= 50 (taxation) I= 100 (planned investment) C = 0.75Yd + 150 (consumption) where disposable income Yd = Y – T. (a) Calculate the equilibrium level of national income. (b) Calculate the total increase in government expenditure and investment needed to increase the equilibrium level of national income by 20.Which of the following will not effect Potential GDP in Country X? government institutions O the unemployment rate O the amount of capital available technologyGive typing answer with explanation and conclusion Explain why a $1 increase in government spending leads to more than a $1 increase in GDP.
- True or false GDP is a macroeconomic concept.An open economy is described by the following system of macroeconomic equations, in which all macroeconomic aggregate are measured in billions of Namibian dollars, N$:Y = C + I + G + X –MC = 160 + 0.6 YdT = 100 + 0.25YX = 80I = 150G = 150M = 22 + 0.25YWhere: Yis domestic incomeYdis private disposable income C is aggregate consumption spending T is government tax revenue I is investment spending X represents exports M represents imports of goods and services. 1.1 (a)Determine the equilibrium level of income/ output. (b) Illustrate the aggregate spending curve and equilibrium level of income on a diagram. (c) Determine the surplus/ deficit in the government budget at equilibrium.(d) Determine trade balance at equilibrium. (e) Find the multiplier applicable to autonomous tax and interpret it.1.2 (a)Use the multiplier applicable to exports, to explain how a 100 billion decline in demand for exports could have affected the economy’s:(i)GDP/ output (ii)Balance of trade (iii)Government budgetAn open economy is described by the following system of macroeconomic equations, in which all macroeconomic aggregate are measured in billions of Namibian dollars, N$:Y = C + I + G + X –MC = 160 + 0.6 YdT = 100 + 0.25YX = 80I = 150G = 150M = 22 + 0.25YWhere: Yis domestic incomeYdis private disposable income C is aggregate consumption spending T is government tax revenue I is investment spending X represents exports M represents imports of goods and services. (a) Determine trade balance at equilibrium. (b) Find the multiplier applicable to autonomous tax and interpret it. (c)Use the multiplier applicable to exports, to explain how a 100 billion decline in demand for exports could have affected the economy’s: (i)GDP/ output (ii)Balance of trade (iii)Government budget
- please kindly assist with the following Which of the following represent injections into the circular flow of income and spending?(a) Exports and investment;(b) Government spending and imports;(c) Government spending and saving; (d) Imports and saving. In the circular-flow diagram, the goods markets are where: (a) The households purchase goods from firms;(b) Firms purchase goods from government;(c) Firms purchase goods from households;(d) The government purchases goods from households. Money overcomes the problem of a double coincidence of wants inherent in the barter system through its function as a:(a) unit of account.(b) store of value.(c) medium of exchange.(d) standard of deferred payment. The ________ demand for money arises out of the need to hold money as a medium of exchange. This demand for money is a function of ________.(a) precautionary; interest rates (b) transactions; national income (c) speculative; interest…Macmillan Education WORK IT OUT LaunchPad For interactive, step-by-step help in solving the following problem, vIsitLaunchPad by using the URL on the back cover of this book. The accompanying table shows gross domestic product (GDP), disposable income (YD), con- sumer spending (C), and planned investment spending (IPlanned) in an economy. Assume there is no government or foreign sector in this economy. Complete the table by calculating planned aggre- gate spending (AEplanned) and unplanned inven- tory investment (IUnplanned). 13. а, GDP YD C IPlanned AEPlanned lunplanned (billions of dollars) $0 $0 $100 $300 400 400 400 300 800 800 700 300 1,200 1,200 1,000 300 1,600 1,600 1,300 300 2,000 2,000 1,600 300 2,400 2,400 1,900 300 ? 300 2,800 2,800 2,200 3,200 3,200 2,500 300 b. What is the aggregate consumption function? c. What is Y*, income-expenditure equilibrium GDP?In the above figure, which of the following policies could move the economy to potential GDP? Group of answer choices increasing government expenditures and decreasing taxes decreasing government expenditures and increasing taxes decreasing taxes and not changing government expenditures increasing government expenditures and not changing taxes
