Question01 Suppose a hypothetical economy producesonly shoes and clothes. Follow
ID: 1250442 • Letter: Q
Question
Question01
Suppose a hypothetical economy producesonly shoes and clothes. Following table shows the prices andquantities of shoes and clothes in two years.
2008
2009
Goods
Price (Rs)
Quantity
Price (Rs)
Quantity
Shoes
100
130
160
170
Clothes
207
240
215
245
From the above information, CALCULATEthe GDP Deflator for year 2009.
Question02
Suppose that Agrovia produces 100bushels of corn and 7 bushels are imported. Of these 87 bushels areconsumed (in C), 10 go for government purchases to feed the army(as G) and 6 go into domestic investment as increases ininventories (I). In addition, 4 bushels are exported.
Consider the above information andanswer the following questions:
Spring2009 VU Assignment 01 ECO403
Question03
The above figure shows the circular flowof income in three sector economy including household sector,business sector (firm) and government sector. INTERPRET how allthese sectors work together.
2008
2009
Goods
Price (Rs)
Quantity
Price (Rs)
Quantity
Shoes
100
130
160
170
Clothes
207
240
215
245
Explanation / Answer
Question 1 GDP Deflator = Nominal GDP x 100 Real GDP = (170*160) + (245*215) x 100 (170*100) +(245*207) = 117.95 Question 2 A. Net exports of Agrovia X-M 4-7 = -3 B. GDP C+ I + G + (X-M) = 87+6+10-3 = 100 Question 3 There is no figure in the question to answer.
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