Business Economics ( Macro economics)

Question 1 a) Give the denition of GDP and explain what items are not included in its calculation? 1:) How is GDP calculated using the expenditure approach? c) How is GDP calculated using the income approach? d) Research the concept of measuring GDP using the value added approach and provide a working denition? e} Explain the problem of"douhle-counting" and how it can be avoided in calculating GDP. Question 2 Assume that an economy is initially operating at the natural rate of output (full employment output). Use the AD-AS model to illustrate graphically the effects on price and output of a reduction in government spending. Explain your assumptions with respect to the range of aggregate supply of your analysis. Question 3 Explain in detail the process of Monetary Policy transmission of an increase in the cash interest rate. Use relevant graphs to describe how a Central Bank action on the interest cash rate ripple through the economy and lead to the target policy goal. ('I'hrce connected diagrams should be used: ( 1) money supply and demand (2) investment demand schedule (3) ASIAD diagram. Interest rates is the variable that connects the rst and second diagram). Question 4 Using the World Bank's World Development Indicators database, ht sdatabankworldbankor ome. x, a Co lete the followin- table. GDP area-its current Australia China C'. in GDP rowel: rate Australia m _ Ination rate .~c> 1:) Produce a plot for each variable (GDP, gdp growth, ination) comparing the four countries. c) What can be inferred with respect to economic growth and price control in each of these economies