faor.lob THE UNIVERSITY OF THE WEST INDIES EXAMINATIONS OF API 2014 ‘Code and Name of Course: ECON 2005 — Social and Economic Accounting Paper: Theory Date and Time; Wednesday oth Aprit, 20m bm Duration: 2 hours INSTRUCTIONS TO CANDIDATES: This paper has 6 pages and 7 questions. Candidates are required to answer Any Four (4) Questions @The University of the West Indies Course Code: ECON 2005 2044...1. Explain why the Production measure of GDP would give the same result as the Income measure of GDP and the Expenditure measure of GDP. Use the Data below to caleulate the: a. Production measure of GDP b. The Income measure of GDP and ©. The Expenditure measure of GDP. Please show all components of each measure. when Purchases of Intermediate Goods by Financial & Non-Financial Corporations Compensation of Employees Exports of Manufactured Goods to the Rest of the World ‘Government Expenditures ‘The following payments were made from the Surphis generated in Production: 5.1. Interest 5.2. Rental of Land 5.3. Consumption of Fixed Capital Assets 5.4, Dividends to Shareholders 5.5, Taxes on Products Household Consumption of Domestically Produced Goods Building Construction by Financial Corporations Imports of Raw Materials Change in Finished Goods Inventories 2. Write short notes on any four (4) of the following: ‘The Retail Price Index and the GDP Implicit Price Deflator, Product Balance of a product, Headline and Core Inflation. Market and Non-Market Producers GDP at Constant Prices Institutional Unit 3. What does a Balance of Payments Statement measure? Use the following data to measure: 1a) The country’s balance on merchandise trade. b)_ The country's balance on current accounts, ©) The country’s balance on capital accounts, d) The Balance of Payments. ‘Note there is no change in official reserve transaction balances. ©The University of the West Indios Course Code: ECON 2005 377 855 40 250 62 46 120 105 135, 843 210 20 420 (5 marks] {5 marks} {5 marks} [5 marks] [20 marks] [4 marks] [4 marks] [4 marks] [4 marks} [4 marks]4, An economist at the Ministry of Finance requires your assistance in developing a price index for certain food products. The data presented below show the prices and quantities bought by a page 3 Balance of Payments Imports by sections of the SITC Imports of Manufactured Goods Imports of Machinery and Transport Equipment Imports of Food, Beverages and Tobacco Imports of All Other Merchandise Trade Exports of which Mineral Fuels, Lubricants & Related Materials Chemicals Food, Beverages and Tobacco (Other Merchandise Exports Cunrent Unrequited Transfers (Credit) Current Unrequited Transfers (Debit) Visitor Expenditure in Trinidad & Tobago Interest Income Paid on Foreign Owned Assets Private Sector Direct Investment Outflows Private Sector Direct Investment Inflows Expenditure on Travel Abroed Official Borrowing (Credit) Official Borrowing (Debit) Interest Income Rec'd by T&T Residents from Foreign Investments Other Private Sector Outflows Other Private Sector Inflows Insurance Services (Credit) Insurance Services (Debit) Errors and Omissions Change in Official Reserves consumer for the years 2010-2013. Table 1: Price and Quantity of Household Items bought by consumer ussmn 46 1686 680 3392 6748 2427 262 1802 109 80 450 1379 1B 549 n 250 1209 300 4400 81 139 750 2010 2011 2012 2013, Price Price Price |_ttems | Price $ | Quantity|__$ | Quantity |__$ | Quantity |__| Quantity Flour 2 6 B 6| 15 5 15] 4 Sugar 8 4 i 4 zi 4,3 | 4 Milk 9 5 6 8 7 9 7 Rice 8 2 10 2 10 a aaa 3 a, Using 2010 as the base year, construct a Laspeyres Price Index for the period. @The University of b, Construct the Paasche and Fisher Price Indices, c, What do they reveal about food prices over the period 2010 -2013 West indies. Course Code: ECON 2005 [5 marks] [10 marks) [5 marks)page 4 Use the Industry and Product Data provided below to construct a Supply Table at Basic Prices and [20 marks) a Use Table at Producers’ Prices. Products: Industries: © Petroleum ‘© Exploration and Production (ExpProd) extracts © Natural Gas Petroleum and Natural Gas for the Domestic ‘© Motor Vehicle market and Exports, © Electricity © Manufacturing (MFG) sells Motor Vehicles and © Distribution Electricity. © Wholesale/ Retail Trade (Distr) provide Distributive Services. ‘© Public Administration produces Non-Market Services. EXPL & PRODUCTION _| MANUFACTURING WHOLE- SALE/ PETRO- MOTOR | ELECTRI- | RETAIL | PUBLIC LEUM | Gas _|vewicues| city | TRADE | ADMIN PETROLEUM SALES 350 270 320 10 GAS SALES. 270 250 MIVEHICLE SALES. 990 1300 ENDING STOCK (F/GOODS) 45 15 0 BEGINING STOCK (F/GOODS) 35 25 60 PURCHASES OF PETROLEUM. 300 PURCHASES OF GAS 50 50 220 PURCHASES OF M/VEHICLES 1000 "PURCHASES OF IMPORTED MATERIALS 230 PURCHASES OF ELECTRICITY 100 50 60 PURCH. OF GOVT PUBLICATIONS 10 ENDING STOCK PURCH) 27 66 BEGINING STOCK (PURCH.) 24 53 PURCHASES OF ELECTRICITY 8 100 WAGES AND SALARIES 250. 470 60 193 SALES TAX, 100 CONSUMPTION OF FIXED CAPITAL, 150 70 @The University of the West indies Course Code: ECON 2005page 5 Ques 5. Continued. OTHER DATA: EXPORTS OF PETROLEUM 390 EXPORTS OF GAS 130 IMPORTS OF MOTOR VEHICLES 240 IMPORTS OF MATERIALS 230 HOUSEHOLD CONSUMPTION: GAS 30 ELECTRICITY 60 MOTOR VEHICLES 800 FIXED CAPITAL FORMATION: ‘MOTOR VEHICLES 530 6. a, Use the statistical data provided to complete a simple sequence of accounts including: i. Production Account iv, Use of Income Account ii, Primary Distribution of Income Account v, Capital Account Secondary Distribution of Income Account [10 marks] Provide Estimates of the Following Key National Accounting Aggregates: i, Gross Value Added iv. Gross Saving ii, Gross National Income v. Net Lending/Borrowing iii, _ Gross Disposable Income [10 marks] 1_| output of Domestically Produced Goods 350 2_| Output of Domestcally Produced Services 650 |_3_| Material Inputs used in Production [ as0 ‘4 | Compensation of Employees at 600 5_| Current Transfers receivable from the Rest of the World 15 | 6_| Current Transfers payable to the Rest of the World 25 7 | Compensation and Property Income receivable from the Rest of the World 40 8_| Services consumed in production a 100 9_| Compensation and Property Income payable to the Rest of the World, 10. 10_| Capital Transfers fom the Rest of the World 10 11_| Gross Fixed Capital Formation i [as 12 | Capital Transfer tothe Rest ofthe World 10 13 Inventories 25 [14 _| Final Consumption Expenditure of Households and Government 400 15 _| Fuel, Blectricty and Water used-up in production 50 Course Code: ECON 2005page 6 7. a, Define the following : i, Basic Prices ii, Producers’ Prices iii, Purchasers’ Prices [6 marks] b. What adjustments must be made to Basic Prices to arrive at Producers’ Prices? {3 marks} fe. Whatadjustments must be made to Producers’ Prices to arrive at Purchasers” Prices. [3 marks} 4. Use tho information to calculate: Value Added at Producers’ Prices and ii, Value Added at Purchasers’ Prices. [8 marks} (1 [output of Domestic Producers at basic prices 1200 [2 | axes on Products 100) 3 | Costs of Materials Used 300 4 | Deductible VAT on Materials Purchased 30 5 | Costs of Services used i 250 | [V6 | Deductible VAT on Services Expense 40 | 7 | subsidies on Products ie [20 8 | Services consumed in production 100 | 9 | invoiced charges for Transportation of Materials purchased 20 10 | Wholesalers Margin on Materials Purchased 30 11 | Transportation Costs charged separately (o Final Consumers 50 12 | Retailers Margin on Re-sales to Households end Government ea 90 END OF QUESTION PAPER The University of the West Indies Course Code: ECON 2005 2044 vloned