Exercise 8.1 Given changes in m aysis: i IN Macroeconomics vari i nomy, indicate what will be it’s likely effect on cece a uct, Inthe space provided, write 4 85 Domestic . if GDP increa i decreases OF Cif GDP does not change or is Constant . eae 1, An across the board increase in salaries given to government employees, _ 2 An improved variety of rice produced by farmers of Nueva Ecija. _______ 3.._ Increase in the imports of electronic Gadgets of Kal-el Enterprises. . Increase in the beneficiaries of Conditional Cash Transfers for the low income families. . An increase in foreign investment in the Philippines Publication of a textbook in Economics. Increase in monthly allowance of a college student . . An increase in the expenses for cell phone loads. penny ). The purchase of a foreclosed house and lot of Salud Family from the Philippine National Bank. ——_____10. The winning in the lotto of P100 million by the Nuguid Family. ——___ 11. Anincrease in savings among Filipino children. —___12. Alteo Digital and Printers, Inc. purchased a new printing machine from Germany. —____ 13. Increase in the number of vendors along the university belt. —__ 14. The purchase of government bonds . ~____ 15. construction of the La Fortades Executive Suites.a —_—"—~—~_SS—s—s——“ —;>lhltlttrtrttt wine qsection cours Exercise 8.2 Score Date INCOME ACCOUNTS NaTiOnAl que of false. Write T if the statement is correct, if it is not change the underlined word to make it true 1. —_—— 2. — 3. _ 4. 5. 6. 7 — fh —==2 GNLorGNP measures only the goods and services produced within the geographical boundary of the country, Personal Income is measured in terms of factor cost while GDP is measured in terms of market value of output produced in the economy. Real GDP increases because of an inflation. An increase in the depreciation expense will mean an increase in the GDP. GDP will remain constant even there is an increase in personal savings. More exports in the country bring about a decrease in the GDP. Anincrease in taxes decreases disposable income hence a decrease in the GDP. The difference between the value of GNI and the GDP is just the amount equal to Depreciation. An increase in transfer payment like pension and SSS benefits will mean an increase in GDP. Production in the underground economy or the informal sector is excluded in the GDP. -161-Exercise 8.3 yane —_—_______ Score —— —_—————_ Date On the blank before each number in column 1 copy the letter of the correct answer in column 2. moyise & Section NATIONAL \NCOME ACCOUNTS MATCHING TYPE: 1. GNlor GNP hn 3. GDP 4. Per Capita RGDP 5. RGDP 6. Net Exports 7. Personal Disposable Income 8. Personal Savings —____9._ Depreciation —________10._ National Income -163- a. b. a d. k. C+14+G+(X-M) X-M GDP + Net Primary Income RGDP/population Gross Investment — Net Investment GDP - Depreciation Personal Income — Personal Tax Poy-c CGDP/ price deflator Rent + wages + Interest + normal profit NY +1BTExercise 8.4 ——__ Score —_—__ ae a section ——__ Date False. Teo 1. The difference between the Gr —_ and the Gross National Income to the net primary income, ‘Oss Domestic Product is the amount equal 2. An increase in savings, taxes and im ; ports contribute to growth in the economy. 3. A large underground economy results to understated —_— Gop. 4. An increase in saving if not countered balanced by investment will result to a shortage of goods and ser- vices in the economy. 5. The most important determinant of consumption and saving is the price level. Multiple Choice. Copy the letter of the correct answer on the blank before each number. ——— __ 1. Which of the following will cause GNI/ GDP to rise, an increase in a. imports c. taxes b, savings d. investment ——— 2. The largest part of the total amount spent on goods and services in the Philippines is on: a. consumption c. government purchases b. investment d. net exportses | 3. The National income accounts avoid double Counting by: a. Excluding transfer payments b. counting final goods only €. counting both intermediate and final goods d. counting intermediate goods only 4. Which of the following best measures improvement in the standard of the living of a nation when compared to other nations? a. growth in nominal GDP b. growth of real GDP c. growth in real GDP per capita d. growth of national income 5. Which of the following will likely increase personal income? a. increased taxes b. increased transfer payments ¢. increased SSS contribution d. increased subsidy -166-Exercise 8.5 Score Date sft 1. Computes the value of roducti _—— by reflecting only the changes inthe aaa) goods and Services, - Y 2 eee aetna to households for factors p used, government income fro a capital and Corporate income : 3. Ratio of GDP to Population, — 4 Measures the total value of final goods and ae services produced by the Citizens of the Country at prices Prevailing during that year. 5. Funds transferred to the recipient without him ee rendering Corresponding work, 6. The other name for capital consumption — allowance, 7. Amount available for households either to save a or spend. 8. Value of all locally-produced Boods and services ss sold at their market price, 9. Refers to the relationship between exports and imports. 10. The income of households plus their non- economic income. SETB A. Gross National Income H. Depreciation 8. National income | Real Gop © Gross Domestic Product J. Gross capital formation D Transfer payments K. Per capita GDP © Personal disposable income L. _ Balance of trade Personal income M. Net domestic product 6 Subsidy -167-Exercise 9.1 Name Score Course & Section Date ee TRUE OR FALSE 1. Cost push inflation results from a more rapid increase in income than increase in production. 2. Real wages decrease when the rate of increase in Prices is greater than the rate of increase in money wages, 3. Reduction in the Purchasing power of those earning fixed income is one of the advantages of inflation, 4. There is demand because of an autonomous incre expenditures. pull inflation when Prices rise ease in aggregate Peak in business cycle is characterized by severe contraction in the level of economic activity. 6. Seasonal unemployment is in the business cycle, caused by fluctuations 7. “Two much money chasing too few goods”, describes what is called demand pull inflation. voluntarily leave jobs for wi qualified. Structural unemployment occurs when workers hich they are over 9. In order to produce more fuel efficient cars, U.S. auto makers have used less steel and more light weight materials. The unemployment it causes in the steel industry is an example of seasonal unemployment. ney I Oa economy is already experiencing inflation, efforts to reduce unemployment by stimulating aggregate demand are most likely to cause the unemployment rate to rise in the short run, triname course & Section __________ Date Exercise 9.2 Score ————_ petermine who is at an advantage (Adv) or at a disadvantage (Disad) que to inflation. —— — ———— — ———_. az 10. Retired workers receiving their pensions Businessman with investment _ in several companies An office clerk The owner of the only big grocery store in the community Juan who lent out money to a friend with interest Pedro is heavily indebted to several persons Avery thrifty person who always has money in his pocket Disabled workers who rely on government welfare fund Car dealer in a small town A saving account depositor in a bank