Econimics Questionnaire

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Name: Registration Number: Program: Total Marks: [20]  Weight: 5% ………………………………………………………………………………………………………………………………………. Qs.1

a. Why do economists include only final goods in measuring GDP for a particular year? Why don't they include the value of the stocks and bonds bought and sold? Why don't they include the value of the used furniture bought and sold? [4] b. What are the four phases of the business cycle?  [3] Qs.2

Recent figures showed the CPI at 210.7, while one year earlier it was 202.2. [3] a. What was the rate of inflation over the previous year? b. At this rate of inflation, approximately how long will it take for the price level to double? Qs.3

A hypothetical economy's consumption schedule is given in the table below. GDP=DI| C|
6600| 6680|
6800| 6840|
7000| 7000|
7200| 7160|
7400| 7320|
7600| 7480|
7800| 7640|
8000| 7800|
Use the information to answer the following: [5] a. If disposable income were $7400, how much would be saved? b. What is the "break-even" level of disposable income?

c. What is this economy's marginal propensity to consume? d. What is the average propensity to consume when disposable income is $7000? When disposable income is $8000? Qs.4
a. Suppose a $100 increase in desired investment spending ultimately results in a $300 increase in real GDP. What is the size of...
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