Business Economic †Macroeconomic Essay

mind 10a) Which of the following are last-place goods and ope ordain and which are intermediate goods and runs? Please condone why in your answer.i) A windscreen purchased by a motor vehicle spare parts supplier median(a) goods by subject area accounts (gross domestic product) windscreen primary performance value has already been accounted. It is being re exchange at a deflated value as act hand goods.ii) A stark naked bulldozer to be used by a construction confederation Final goods when a construction fraternity buys and uses a new bulldozer becomes intermediate goods when it is used in the production of their products work in subsequent periods.iii) A household cleaning service purchased by a family from a internal cleaning service company Final good the resale value of the business contain value added. but it is not previously included in the kingdomal accounts.iv) Coking coal negociate goods as an ingredient it used into the production of other goods. As atom ic number 26 and steel, steam. Except being sold by exporting.b) An economy originates final goods and services with a market value of $800 billion in a given up year, but only $750 billion worth of goods and services is sold to domestic or foreign buyers. Is this nations GDP $800 billion or $750 billion? Explain your answer.$800 billion is the nations GDP for the year. Because GDP includes the market value of final goods and services produced, despite the consequences of whether these products are sold. The unsold products are added to firms inventories and included in gross national and domestic investment.c) Explain why a new truck sold for use by a transport company is a final good, even though it is a fixed investment (capital) used to produce other goods. Should the value of this truck then be added to GDP or should only the goods it transports be included in GDP?ANSA new product and produced for the ultimate user is the final goods so the new tuck is a final goods, the tran sport company and therefore it should be added to GDP. By the expenditure approach. When a firm buys and uses the new truck, it later becomes an intermediate good into the production of other products in subsequent periods. suspicion 14a) The consumer price index (i.e. CPI) is the most commonly used prize of changes in the general level of prices in Australia. Discuss some of the advantages and disadvantages of exploitation this assess. ANSIt is approved that there are no strong advantages in using this measure.There are three main criticism of this measure and they are1. Typical average basket for several age and income groups at bottom the population may not reflect true consumer expenditure prototype. As, retired heap buy a bundle of products that differs quite markedly form that of a typical family with fewer children related items. The CPI based inflation rate may undervalue the impact of inflation on older large number if the cost of medical services is rising faster th an other items of the CPI.Question 15Which of the following would cause a growth in the bills supply? Answer yes, no, or possibly. If your answer is possibly then explain the circumstances under which the answer would be yes.ANS(a)The selling of political sympathies securities to jargons NO because of money supply goes belt down.(b)A fall in care grade POSSIBLY If the fall in interest was in response to put together in money supply, then the interest rate fall has not caused money supply to rise. The reserve bank decided to reduce interest rates, it would have to increase money supply by market trading operations to ensure that the lower interest ratewas the equilibrium one.(c)An increase in authorities expenditure, financed by borrowing from the banking arena YES increasing money supply by the government outflow.(d)The purchase of government securities by the primordial wedge from the banking sector YES an increase in money supply purchase of government securities by the Central bank.(e)It is agreed by the Treasurer and the Governor of the Central Bank to reduce the target rate of inflation NO fall down money supply because this will result in reserve bank RAISING the cash rate and using market operations trim back the money supply to back it up.Question 16ANS(a)DVD recorders merchandise into the nation from Japan Imports of goods (()(b)Insurance cover purchased in the nation by afield residents Exports of services (+)b) The nation gives oversea aid to a developing land Capital transfers sent overseas from the nation ()(d)US car company sets up a factory in the nation Investment in the nation from overseas (+)(e)Some of the nations residents take a holiday in Bali Imports of services (()(f)Interest earned by the nations residents on overseas assets Other income inflows (+)(g)Running down the stock of foreign exchange in the Central Bank of the nation Drawing on reserves (+)(h)Migrants to the nation transferring plaza to the nat ion Capital transfers to the nation from overseas (+)(i)New deposits made in banks in the nation by overseas residents Short-term financial inflows (+)(j)The nations palm oil is sold in the United Kingdom Exports of goods (+)