1. In Country X, these 4 goods are produced and used in the \"basket of goods for inflation calculation. What is the overall rate of inflation between 2018 and 2019 if the weight of each goods in the basket in 2019 remains the same as in of 20187 Year 2018 Goods Price Quantity Year 2019 Goods A B C D Price 9 6 8 3 Country Y has 3 productive sectors: Farming, Manufacturing and Retailing. = * Manufacturers produce goods each year value total $500. They sell $400 to Retailers and $100 directly to household and government consumption. * Retailers buy goods for 8400 from Manufacturers and buy $50 from Farmers. * Retailers sell goods for final consumption of household for $500. Manufacturers buy goods value $200 from Farmers. Farmers also sell $100 of their output to the household for consumption. *+ Farmers sell nothing directly to the government. * Farmers have their own inputs for their agricultural production (such as seeds, fertilizers) so they do not buy anything from Manufacturers or Retailer. 1. What is the value-added of each sector? 2. What is the Total GDP of Country Y? 3. The national income account of Country Z in 2019 is as follows: Expense Type WValue in Z$ Billion Total Consumption 418 Investment 158 Government Spending 125 Total Exports 151 Total Imports 156 3.1. What is its Nominal GDP in 20197 3.2, If in 2020, Consumption rises by 10% but output only rises by 5% while investment and government spending both increase by 3%, what will happen to the gap between Total Exports and Total Imports? Explain the reason for this. 4. The table below shows kg. of wheat and meters of cloth that the United States and the United Kingdom can produce with one hour of labor time under four different cases. 4.1. In each case, identify which commodity that the United States and the United Kingdom have a compara ive advantage or disadvantage over each other. Case Case Case Case Case Case Case Case A A B B C C D D Country USs UK Us UK USs UK USs UK Wheat (W) 4 1 4 1 4 1 4 2 (kg/hour) Cloth (C) 1 2 3 2 2 2 2 1 (meter/hour) 4.2, Indicate in each case whether or not trade is possible? 4.3. Suppose that in Case B, the United States exchanges 4W for 4C with the United Kingdom. (a) How much does the United States gain in terms of cloth? (b) How much does the United Kingdom gain in terms of cloth? (c) What is the range for mutually beneficial terms of trade? (d) How much would each nation gain if they exchanged 4W for 6C instead? \f6. Choose the BEST answer for the following questions. 6.1. Which of the following is included in the investment component of GDP? [ E S spending to build new houses spending to build new factories spending on business equipment such as welding equipment All of the above are included in the investment component of GDP. 6.2, After the break out of COVID 19, governments of many states in the United States raised expenditures to increase health checking and facility sanitaion at airports. The related- purchases of goods and services are a b. c. d. not included in GDP since they do not represent production. not included in GDP since the government collects taxes to pay for them. included in GDP since government expenditures on goods and services are mcluded i GDP. included in GDP only to the extent that the federal government, rather than state or local governments. paid for them. 6.3. Ifa U.S. citizen buys a television made in Korea by a Korean firm, then oo U.S. net exports decrease and U.S. GDP decreases. U.S. net exports are unaffected and U.S. GDP decreases. U.S. net exports are unaffected and U.S. GDP 1s unaffected. U.S. net exports decrease and U.S. GDP is unaffected. 7. The Table below shows balance of payments data for Sri Lanka (S million). 7.1 Fill in the cells marked A) and C) 7.2 How could have Sri Lanka financed its overall balance of payments deficit? Balance of -1406 | Capital Account 55 Goods Trade (This is a sub-AC) Balance of 272 Net direct 252 Services Trade nvestrnent Investment -251 Net Portfolio Flow | 2 Income Net Transfers 1097 Net Other -162 Current Account | A) Errors & C) Omissions Overall Balance -331