Answer to Question #3717 in Macroeconomics for pais

Question

Question 1

What component of GDP (C, I, G, X, M) if any, would each of the following transactions affect? Explain your answer clearly.

a) Toyota issues new shares of stock to finance the construction of a car plant.
(5 marks)
b) You buy a new Toyota Camry. (5 marks)
c) The government pays out government servants’ salary. (5 marks)
d) You spend the entire weekend cleaning your house. (5 marks)

Evaluate and explain as accurately as you can the manner in which each of the following individual would be affected by fairly rapid inflation?

a) A department store assistant (5 marks)
b) A pensioner who receives fixed monthly income. (5 marks)
c) The owner of an independent coffee shop

Answer 1

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