Business Economic †Macroeconomic Essay

Question 10a) Which of the following atomic number 18 terminal unattackables and service and which ar mediate goods and work? Please relieve why in your answer.i) A windscreen purchased by a motor fomite sp atomic number 18 parts supplierIntermediate goods by matter accounts (gross domestic return) windscreen primary production entertain has already been accounted. It is being resell at a deflated value as second hand goods.ii) A new-fangled dozer to be employ by a construction bon ton Final goods when a construction attach to buys and uses a new bulldozer becomes intermediate goods when it is used in the production of their products services in attendant periods.iii) A household cleaning service purchased by a family from a municipal cleaning service fellowship Final good the resale value of the business contain value added. precisely it is not previously include in the commonwealthal accounts.iv) Coking coal Intermediate goods as an ingredient it used into the production of differentwise goods. As iron and steel, steam. debar being sold by exporting.b) An economy produces final goods and services with a market value of $800 million in a given year, but unaccompanied $750 zillion worth of goods and services is sold to domestic or foreign buyers. Is this res publicas gross domestic product $800 billion or $750 billion? explain your answer.$800 billion is the farmings 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 realmal 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?autonomic nervous systemA new product and produced for the ultimate user is the final goods so the new tuck is a final goods, the transport company and therefore it should be added to GDP. By the expenditure access. When a firm buys and uses the new truck, it subsequently becomes an intermediate good into the production of other products in subsequent periods.Question 14a) The consumer price index (i.e. CPI) is the most(prenominal) commonly used measure of changes in the normal level of prices in Australia. Discuss some of the advant elds and disadvantages of utilize this measure. ANSIt is approved that there are no strong advantages in utilise this measure.There are three main criticism of this measure and they are1. Typical average basket for several age and income groups within the population may not ricochet true consumer expenditure prototype. As, retired people buy a bundle of products that differs quite markedly form that of a typical family with fewer children related items. The CPI establish inflation rate m ay undervalue the partake of inflation on older people if the embody of medical services is rising faster than other items of the CPI.Question 15Which of the following would cause a growth in the property go forth? resolvent 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 government securities to banks NO because of money confer goes down.(b)A fall in matter to rates peradventure If the fall in pertain was in repartee to raise in money sum, then the engagement rate fall has not caused money make out to rise. The modestness bank decided to reduce interest rates, it would have to increase money supply by market operations to ensure that the lower interest ratewas the equilibrium one.(c)An increase in government expenditure, financed by borrowing from the banking sector YES increasing money supply by the government outflow.(d)The purchase of government securities by the Central a ssert 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 regulator 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 reducing 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 oversea residents Exports of services (+)b) The nation gives overseas aid to a developing country jacket 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 argument of foreign exchange in the Cen tral Bank of the nation Drawing on reserves (+)(h)Migrants to the nation transferring property to the nation 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 joined Kingdom Exports of goods (+)