Questionnbsp the table lists some macroeconomic data for

Reference no: EM13372440

Question:

The table lists some macroeconomic data for Xanadu in 2012.

Item	Billions of dollars
Wages paid to labour	800
Consumption expenditure	1,000
Profit, interest and rents	340
Investment	150
Government expenditure	290
Net exports	-34

(a) Calculate Xanadu's GDP in 2012.

(b) Explain the approach (expenditure or income) that you used to calculate GDP.

An economy produces only apples and oranges. The base year is 2011, and the table gives the quantities produced and the prices.

Quantities	2011	2012
Apples	60	160
Oranges	80	220

Prices	2011	2012
Apples	$0.50	$1.00
Oranges	$0.25	$2.00

(d) Calculate real GDP in 2011 and 2012 expressed in base-year prices.

The tables describe an economy's labour market and its production function in 2010.

Real wage rate (dollars per hour)	Labour hours supplied	Labour hours demanded	Labour (hours)	Real GDP (2005 dollars)
80	45	5	5	425
70	40	10	10	800
60	35	15	15	1,125
50	30	20	20	1,400
40	25	25	25	1,625
30	20	30	30	1,800
20	15	35	35	1,925
			40	2,000

(e) What are the equilibrium real wage rate, the quantity of labour employed in 2010, labour productivity and potential GDP in 2010?

(f) In 2011, the population increases and labour hours supplied increase by 10 at each real wage rate. What are the equilibrium real wage rate, labour productivity and potential GDP in 2011?

(g) In 2011, the population increases and labour hours supplied increase by 10 at each real wage rate. Does the standard of living in this economy increase in 2011? Explain why or why not.

Reference no: EM13372440

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