Consumption-investment-government purchases and net exports

Assignment Help Business Economics
Reference no: EM13815055

For each of the following transactions, how much does US GDP increase? And how much, if at all, do consumption, investment, government purchases and net exports change?

1. Peter Rich buys a 1928 painting by Pablo Picasso at an auction for $1 Million. In addition to the purchase price, he pays a services fee of $30,000 to the auction house.

2. A US automobile maker buys car parts for $50,000 from Mexico. Those parts are assembled together with American parts (made in the current year) and 10 cars are built. Eight of these cars sell for $20,000 each in the US, one is sold to Canada for $20,000, and one is kept as inventory, valued at $18,000.

3. Peter Rich pays $100,000 in income taxes. Half of this revenue is used by the government to pay the salary of an employee of the Department of Labor, and the other half is used to pay unemployment benefits.

Reference no: EM13815055

Questions Cloud

Assignment on economic growth : Dan Demaar and Rob Runten are working on a class assignment on economic growth. Dan collects the GDP growth data for the country Fanez, which is located in the Middle East. The growth rate of the population in Fanez has consistently exceeded the real..
Use sales taxes as means of generating revenue : State and Local Governments in this country use sales taxes as means of generating revenue. In other countries, a value added tax (VAT) is used to generate Government revenue. Please explain the difference. In your opinion, which tax system is most e..
The total cost functions for the two methods : Consider the owners of Cutitforme, a small lawn-mowing service. They can use one of two methods to mow lawns. Method 1 is to purchase a tractor that costs $200 a year to own and then spend $1 (for labor and gas) for every acre of grass cut. The total..
Acc reflection prompt what products would they make : Reflection Prompts Please think about and answer the following prompts.  Reflection Prompt 1 Summarize three of the ethical theories that are explained in Chapter 1 of Introduction to Business Ethics. Explain how people running businesses would const..
Consumption-investment-government purchases and net exports : For each of the following transactions, how much does US GDP increase? And how much, if at all, do consumption, investment, government purchases and net exports change? Peter Rich buys a 1928 painting by Pablo Picasso at an auction for $1 Million. In..
Level on the maintenance performance hierarchy : How does lean maintenance differ from the traditional approach under which a maintenance department has the responsibility for all maintenance functions? Which level on the maintenance performance hierarchy would you expect to find a lean maintenance..
Production possibilities curves are parallel straight lines : Two countries will have zero incentive to trade if their production possibilities curves are parallel straight lines because. One country has a comparative advantage in the production of both goods, thus providing that country with no incentive for t..
What is the retail method : Questions are uploaded as attachments.
The terms of trade between two countries refer : The terms of trade between two countries refer to

Reviews

Write a Review

 

Business Economics Questions & Answers

  What is the total amount that the bank can create

What is the change in the total amount that J & R National Bank can loan out? Explain.ii. What is the total amount that the bank can create? Explain.

  Identify a plc company that uses strategic management

Identify a PLC company that uses strategic management - this company may be prosperous, booming, in decline, or in economic difficulties.

  Upstream wholesaler with monopoly pricing power

Assume that this cost is set by an upstream wholesaler with monopoly pricing power.

  Budget surplus to reduce the existing debt

Which of the following would occur if the federal government decided to use a budget surplus to reduce the existing debt.

  What is the present value of the contract

Italian energy concern Eni SpA agreed to annually purchase 2 billion cubic meters of LNG from Nigeria LNG Ltd. for resale to the United States. The gas is to be produced at the Bonny facility in Africa and delivered to the Cameron import terminal in ..

  More lipstick or more eye shadow

Explain why she should buy more lipstick or more eye shadow. Elucidate how your calculations also then elucidate your answer.

  What kind of safety net

Globalization has pulled hundreds of millions of people out of poverty in China and India. How should that gain be weighed against the structural changes that globalization requires in the United States? Should there be a safety net for those most hu..

  Evalute an environmental problem and explain how

Evalute an environmental problem and explain how one of the three groups might resolve it? There is no word limit for the solution.

  Using variation in us bequest taxation natural experiments

Is there some summary article on using variation in US bequest taxation as natural experiments? Has there been variation over time or over different states? Is there perhaps a paper that already has used this?

  Phase out of personal exemptions based on income

You have a gross income of $386200 in 2014. Your filing status is married filing jointly. You might itemize deductions and you are allowed 5 exemptions. During the year you donated 3.3% of your gross income to charity and you have an interest-only mo..

  Fixed exchange rate and unrestricted capital flows

Suppose that a country has a fixed exchange rate and unrestricted (financial) capital flows. Which of the following would the country NOT experience?

  Significantly lower financial savings for all individuals

As a general rule, is it safe to assume that a lower interest rate will encourage significantly lower financial savings for all individuals? Explain.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd