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4.An increase in worker productivity will lead to a: Positive supply shock Negat

ID: 1226583 • Letter: 4

Question

4.An increase in worker productivity will lead to a:

Positive supply shock

Negative demand shock

Negative supply shock

Positive demand shock

5.Which of the following statements about price wars is true?

Price wars tend to increase the short-run flexibility of prices.

Firms that have to deal with the possibility of price wars often have extremely flexible prices.

Firms that have to deal with the possibility of price wars often have sticky prices.

Firms that do not have to deal with the possibility of price wars often have sticky prices.

10.Which of the following is not included in personal consumption expenditures?

New furniture and appliances bought by homeowners

Food purchased at supermarkets

Purchases of mutual funds by consumers

Payments for cable and Internet services to homes

11.

A.13 only

B.1, 12, and 13

C.1 and 2

D.2, 11, and 12

12.

Below is a list of domestic output and national income figures for a certain year. All figures are in billions. The questions that follow ask you to determine the major national income measures by both the expenditures and the income approaches. The results you obtain with the different methods should be the same.

Instructions: Enter your answers as whole numbers.

a. Using the above data, determine GDP by both the expenditures and the income approaches. Then determine NDP.

     GDP using the expenditures approach = $ billion.

     GDP using the income approach = $ billion.

     NDP = $ billion.

b. Now determine NI in two ways: first, by making the required additions or subtractions from NDP (method 1); and second, by adding up the types of income and taxes that make up NI (method 2).

     Method 1 = $ billion.

     Method 2 = $ billion.

c. Adjust NI (from part b) as required to obtain PI.

     PI = $ billion.

d. Adjust PI (from part c) as required to obtain DI.

     DI = $ billion.

Category Value Category Value Personal consumption expenditures 295 Net exports 11 Net foreign factor income 4 Dividends 16 Transfer payments 12 Compensation of employees 273 Rents 14 Taxes on production and imports 18 Statistical discrepancy 8 Undistributed corporate profits 21 Consumption of fixed capital (depreciation) 27 Personal taxes 26 Social Security contributions 20 Corporate income taxes 19 Interest 13 Corporate profits 56 Proprietors' income 33 Government purchases 72 Personal saving 20 Net private domestic investment 33

Explanation / Answer

4.

a positive supply shock

better productivity means increase in output per unit of labor, so it will increase supply which is positive as it is enhancement of effienency.

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