Rubin owned a van that he leased to his friend, Bruno for his food delivery business in 2018. The duration of the lease was for 5 years with $15,000 annual rent. In 2020, Bruno's business was greatly impacted because of the COVID-19 pandemic as he lost a number of contracts to deliver food to his corporate clients based in the city. Bruno realized that he could not afford the annual rental payment for the van unless the situation changed. He discussed his business downturn and financial difficulties with Rubin. He also complained that Rubin did not disclose that the van had a faulty air conditioning system which spoiled some of his food items on the way to deliver them. Rubin denied Bruno's accusation, however promised to reduce the rental amount to $5,000 until the business condition improved.

In 2021, Bruno secured a huge contract with a major public hospital for providing meals to their patients. Bruno's earnings from the business increased exponentially. Rubin demanded from Bruno that not only did he have to pay the full rental amount from 2021, but also the shortfall for the year of 2020 forgone by Rubin.

Advise Bruno, with reference to the relevant legal principles, whether he must pay all the amounts claimed by Rubin.

Question 2: 9 marks

Neil and June are students finishing their business degree and are good friends. In order to pay his tuition fees, Neil runs a small coffee shop in front of the business faculty building of the University. June offers to help him by preparing homemade cakes and pastries based on her mother's famous recipes. Neil says that he cannot pay her although he promises June that if she provides him with enough cakes and pastries to last the summer, he will buy her an Apple MacBook Pro to pursue her passion in graphic design (worth $3000). June jokes with Neil that if he does not buy her the MacBook, she will take him to court and Neil just laughs. In the next six months, June works 20 hours a week preparing cakes and pastries for Neil's business.

Advise June, with reference to relevant legal principles, whether she is legally entitled to the MacBook as promised by Neil.

Lecture 2 Answer the following questions based on the components of GDP. Question 1: If businesses are accumulating more goods in inventories the effect on Investment will be: C" it will depend on the duality.F ofthe goods going into inventory. 0 decreases in investment. C" no change to investment. 0 increases to investment. Part B (10points, questions 11 to 20) Listed in the table below are National Accounts data for a small country: (billions) Consumption 400 Imports 10 Investment (gross) 40 Government purchases 100 Exports 20 Capital Consumption Allowance (CCA) 20 Statistical Discrepancy 5 Receipt of factor income from other countries 12 Payments of factor income to other countries 10 Answer the following questions (provide the correct values for each item) using data provided in the table above: 1 1. Net Exports = 12. Net Factor Income from Abroad = 13. GDP = 14. GNP = 15. NNP = 16. Consumption expenditure as a percentage of GDP = 17. Government expenditure as a percentage of GDP = Questions 18 to 20 use data in the table below: Year 1 Year 2 Price Quantity Price Quantity Oranges $5.00 100 $5.00 150 Pears $3.00 100 $4.00 75 Given the data in the table above representing the total output of a small country. Calculate Real GDP for Years 1 & 2 and the growth rate in Real GDP between the two years. Remember, use Year 2 as the base year.Question 13 25 pts Which of the following would NOT cause real GDP growth from one year to the next? Increase in the number of hours worked per year Increase in the prices paid by consumers A better form of management style that improves workers' productivity All of the above would increase real GDP Question 14 2.5 pts Suppose a country's GDP is $3,526,000,000 in 2019 and then $3,349,000,000 In 2020. What is the country's growth in GDP from 2019 to 2020? 10 -5% 024% Not enough informationQuestion 21 [1 point) Which of the following transactions would be counted toward this year's COPY Cal General Motors purchases 10,000,000 fires from Firestone ()bl A three-hundred year-old painting is cold for $12 million 4 A street gang cars $2 millon from selling Ilegal drugs Your real culate agent earns $5,000 commission when you sell your hundred year old house for $ 100,000 Question 22 [1 point) If a used car dealer purchases a used car for $1/000, restores It and reacls E for $1 500, the doster contributes () value based equal to $500, but nothing is added to GOP value added equal to $500, and contequeraly 1500 Is added to COP nothing to production because only culling goods are involved 14 4value added equal to $1.500, but only $500 k added to COP Question 23 (1 point) When the maind propensity lo comme i 3/4. and in common cperrin will below Its full employment capacity, In the Keymedan model a $25 billion Iscreate In Tellpher is instantaneous nation 24 11 paint ali be easily divided ing that be loots 15Question 2 [1 point] Suppose Japan's economy operates according to Okun's law, with actual GDP = Y200 trillion and actual unemployment = 2 5 percent. If the natural rate of unemployment is 4%, what is potential GDP? Question 3 [6 points] You are given the following information about an economy that is experiencing an investment boom. Consumption 3000 Investment 1200 Government purchases 1500 Net exports X-M -500 Net foreign income 100 Government taxes 1000 Full employment GDP - 5000 and the natural rate of employment is 6%%. (a) Calculate GDP and the current account [I point] (b) Calculate private savings and national savings [! point ] (c) Use Okun's law to calculate the level of unemployment [1 point] (d) Suppose the boom ends and consumption falls by 300, imports fall by 500, investment falls by 250, Government spending declines by 250 and taxes decline by 100. Calculate what happens to GDP, the current account, and national savings. [2 points] (c) Explain whether a large current account deficit is good or bad for the economy in this case, and why. [1 point] Question 4 [2 points] Briefly describe the main differences between the neoclassical and Keynesian models. You should include comments on what they assume about prices and labour supply. What is the effect of positive demand shocks such as an increase in government spending on output and prices in the two models