Homework On National Income Answer Sketch for Selected Questions Dr. Patrick Toche April 2‚ 2011 1 Reference : Mankiw‚ Mankiw‚ Macro (7th)‚ Chapter 2‚ Problem 4. Suppose a woman marries her butler. After they are married‚ her husband continues to wait on her as before‚ and she continues to support him as before (but as a husband rather than as an employee). How does the marriage affect GDP ? What is your reaction to this ? Hints : GDP is a measure of recorded transactions only‚ not
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CHAPTER 1 (Questions are in bold print followed by answers.) 1. What is the cash flow of a 8-year bond that pays coupon interest semiannually‚ has a coupon rate of 6%‚ and has a par value of $100‚000? The principal or par value of a bond is the amount that the issuer agrees to repay the bondholder at the maturity date. The coupon rate multiplied by the principal of the bond provides the dollar amount of the coupon (or annual amount of the interest payment). An 8-year bond with a 6% annual
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In the past half-decade‚ income inequality has increased significantly in Western Australia. As shown in Figure 3‚ that if Western Australia were a country it would be as unequal as Portugal (although much richer)‚ and slightly less unequal than the United States (US). On the other
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After doing this assignment I realized some of the reason that low-income families do what they do. It is very hard for a family to live off of a minimum wage salary; it doesn’t matter if it is a single parent or a two-parent household. The more people are in a household‚ the more expenses there will be‚ I never really thought about that concept until doing this assignment. Something’s that some people might take for granted can actually be a luxury to others. A car for example‚ I never realized
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National income accounting provides economists and statisticians with detailed information that can be used to track the health of an economy and to forecast future growth and development. The measure of national income allows us to compare output and the standard of living of one country with another‚ an increase in the National Income statistics usually an increase in standard of living. The measure of national income that we use to do this is known as Gross Domestic Product (GDP). GDP per capita
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Last year many famous pop and sports stars earned millions of dollars each. Many other entertainment and sports personalities also have very high incomes. On the other hand‚ most people in ’ordinary’ professions like nurses‚ doctors and teachers earn only a small fraction of the income of these ’stars’. What do you think about stars receiving very high salaries? Is it fair that jobs that directly help people are paid much less? Some people may argue that while those pop and sports stars are earning
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In addition to its direct effect on poverty‚ inequality also effects poverty indirectly through its impact on growth. Initial cross-country studies found that greater initial income inequality actually reduces future growth even after controlling for initial levels of GDP and human capital. Evidence predominantly suggests that inequality is bad for growth. The World Development Report 2000/01 concludes that better distribution is possible without a reduction in economic growth. In other words there
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Equilibrium Level of Income The Consumption and Saving Functions Consumption is the part of income spent on goods and services yielding direct satisfaction. It occupies the biggest chunk of the expenditure on output. Y= C+S Where Y= Income C= Consumption S= Saving Factors Influencing Consumption 1. Distribution of national income 2. Interst rate 3. Desire to hold cash 4. Price level 5. Population 6. Income 7. Taxes 8. Attitudes and values Consumption function is the relationship
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time? (Muni) Write the history of national income estimates in India? What are the estimates of National Income before and after independence? Ans: Estimations of National Income before independence: Several estimates of National Income were prepared during the British period. The 1st estimate of national income was prepared by Dadabhai Nauroji for the year 1867 - 68. Accordingly the N.I and Per Capita Income of the country were Rs. 340 crores & Rs
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INCOME INEQUALITY IN THE UNITED STATES OF AMERICA Still to date‚ the problem of income inequality is an issue of a great importance for million of African-Americans and others who struggle to improve their quality of life. It must be known by now‚ that economic injustice has had a devastating impact on black communities all across America. Issues such as inequality and racial discrimination in education‚ the social environment‚ and economics have gone on for too long‚ and it has been engraved
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