8/13/2019 Assignment Finalterm Mba

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ASSIGNMENT FOR FINAL TERM

Economics for Managers (MACRO)

Last date of submission !ate of Fina" E#amination$% &

a. Define the following terms:

i) Gross National Product (GNP) ii) Gross Domestic Product (GDP)iii) Net Domestic Product (NDP) iv) National Income (NI)v) Personal Income (PI) vi) Disposable Personal Income (DPI)

b. Distinguish between GNP and GDP.C. how how calculate from GDP to Disposable Personal Income (DPI) with an e!ample.

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a. "!plain the value added method of GDP measurement.b. #hat is the e!penditure approach of GDP measurement$ "!plain the e!penditure components ofGDP.c. #hat is the income approach of GDP$ "!plain the income components of GDP.

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a. #hat is circular flow model$ Illustrate the circular model of an open econom%.b. Compare the e!penditure and income approach of GDP measurement.

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a. Distinguish between nominal GDP and real GDP$ uppose a countr% is produced the followinggoods and services in the different %ears that are given in the below table:

&ear 'ood helter Cloths

*unit +uantit% *unit +uantit% *unit +uantit%

,-- /- 0,-- 0,-- 1- 0/- 0--

,--2 1- 0/-- 0/-- 0,- ,-- 0/-,--1 0-- ,--- ,--- 02/ ,/- ,--

i. Calculate the Nominal GDP for each %ear3ii. 'ind the 4eal GDP for each %ear taing ,-- as base %ear3iii. 'ind the GDP deflator for ,--2 and ,--1.

b. #hat steps are followed for constructing CPI$ uppose a maret baset consists of the followingconsumption goods which are shown in the table below

&ear #heat 5anana Chicen

+uantit%

(6g)

Price

(*6g)

+uantit%

(Do7en)

Price

(*Do7en)

+uantit%

(6g)

Price

(*6g),--/ 0,- 8- ,- /- 0/ 9-,-- 0,- - ,- - 0/ 0,-,--2 0,- / ,- 2/ 0/ 0/-

i) Compute the CPI in ,--.ii) Calculate the inflation rate for the %ear ,--2 and interpret %our result.

8/13/2019 Assignment Finalterm Mba

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c. Distinguish between GDP deflator and CPI$ Consider the following data on e!penditures for theCountr% ; in the %ear ,--2 (Data are in millions of dollars.) (8 the consumption and investment functions are given asfollows:

C + &,,, - ,./, 0 and I + ',,,

i. 'rom the consumption function> find the autonomous consumption and marginalpropensit% consume (BPC) and interpret the BPC.

ii. 'ind the level of euilibrium income and the value of the multiplier.iii. 'ind out the saving function and Barginal Propensit% to ave (BP).iv. #hat will be the effect on euilibrium level of income if I increase b% 0--- units$v. Draw a diagram indicating the euilibrium points.

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a. Define mone%. Describe the functions of mone%.b. #hat is B0 and B, mone%$c. #hat is fractional reserve baning s%stem$ ow a ban can create suppl% of mone% throughfractional reserve baning s%stem$ "!plain with e!ample.

$% 2a. #hat are the maEor functions of central ban$ "!plain the e% instruments of monetar% polic% focontrolling the mone% suppl% of the econom%.

b. #hat does mean demand for mone%$ #hat are the different motives of demand for mone%$ "!plain.

EN!