Comm601 Principles Of Managerial Economics Assessment Answer

1. Define GDP and distinguish between a final good and an intermediate good. Provide examples.

 

 

2. Classify each of the following items as a final good or service or an intermediate good or service and identify each of the items as either a component of consumption expenditure, investment or government expenditure on goods and services.

 

(a) Banking services bought by a student.

(b) New cars bought by Hertz, the car rental firm.

(c) Newsprint bought by The Australian.

(d) New house bought by Wayne Swan.

 

 

3. What will happen if there is a shortage or a surplus of NZ dollars in the foreign exchange market? Explain your answer.

 

 

 

4. Explain the exports effect and provide an example of the exports effect on the demand for NZ dollars.


 

 

5. If the government budget deficit increases and the private sector balance does not change, what will happen to net exports? Explain your answer.


 

 

6. Use the following information to work Problems (a) and (b). Show all your workings.

Michael is an Internet service provider. On 31 December 2018, he bought an existing business with servers and a building worth $400,000. During his first year of operation, his business grew and he bought new servers for $500,000. The market value of some of his older servers fell by $100,000.

(a) What was Michael’s gross investment, depreciation and net investment during 2019?


 

(b) What is the value of Michael’s capital at the end of 2019?



7. Use the following data to work Problems (a) and (b).

The Australian dollar exchange rate increased from $US 0.85 in June 2018 to $US 1.07 in June 2019, and