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Consider an economy that produces only chocolate bars. In year 1, the quantity produced is 10 bars and the price is Rs.400 per bar. In

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Consider an economy that produces only chocolate bars. In year 1, the quantity produced is 10 bars and the price is Rs.400 per bar. In year 2, the quantity produced is 12 bars and the price is R5500 per bar. in year 3, the quantity produced is 15 bars and the price is R3600 per bar. Year 1 is the base year. a. What is nominai GDP for year 1? b. What is reai GD?I for year 2? c. What is real GDP for year 3? d. What is the GDP deator for year 2? e. What is the GDP deator for year 3? f. What is the percentage growth rate of real GDP from year 2 to year 3? {Please avoid typing '36 sign} Consider a loanable funds market of Pakistan. Suppose, if government want to implement the policy to provide incentives on savings by allowing people to shield their savings by opening Retirement Accounts with commercial banks. What is the effect of this policy on the market for loanable nds 3. Interest rate will [Please write one word either increase or decrease in the blank]. b. Quantity of loanable funds will (Please write one word either increase or decrease in the blank) Now assume, the parliament passed a tax reform aimed at making investment more attractivefor instance, by instituting an investment tax credit. An investment tax credit gives a tax advantage to any rm building a new factory or buying a new piece of equipment What is the effect of this policy on the market for loanable nds {3. Interest rate will [Please write one word either increase or decrease in the blank]. d. Quantity of loanable funds will (Please write one word either increase or decrease in the blank) Assume that the banking system has total reserves of 125.250 billion. Assume also that required reserves are 1|] percent of checking deposits and that banks hold no excess reserves and households hold no currency. 3. Calculate the money multiplier? b. Calculate the money supply? If the State Bank of Pakistan now raises required reserves to 12.5 percent of deposits, (3. Calculate the money multiplier? cl. What will be the effect on Reserves? (Please write only one word "increase\

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