Monday 8 July 2013
Assignment 02
Eco401 (Economics)
Marks: 20
The Case:
Norway has the second highest GDP per-capita and enjoys fourth highest GDP
per capita (in terms of Purchasing power (PPP)) in the world. Norway is
considered the second wealthiest country in the world in monetary value. It has
largest capital reserve per capita of any nation. The standard ofliving in Norway
is among the highest in the world. Unemployment rate in Norway is very low;
currently it is 3.0%.It is richly endowed with natural resources including
hydropower, petroleum, fish, forests and minerals. In 1960s large reserves of
petroleum and natural gas were discovered,which led to a boom in the economy.
Export revenues of Norway from oil and gas have been raised to almost 50% of
total exports. Norway is the fifth largest oil exporter and third largest gas exporter
in the world. Suppose in year 2011, Norway’s saving was characterized by the
equation, S = -200 + 0.40Y. Government expenditures were Rs.240 million and
total investment was about Rs.110 million and Taxes are Rs.290 million. At that
time, Norway paid Rs.150 million as import payments and earned Rs.230 million
as export revenues.
Requirement:
With the help of above information, calculate the following for Norway’s economy
for the Year 2011.
a. Equilibrium Output Level with the help of injections leakages method.
b. Saving level.
c. Consumption level
d. Average propensity to consume (APC)
e. Average propensity to save (APS)
Marking Scheme:
Part a, b, c, d, e:(Marks: 6+4+4+ 3+3)
Eco401 (Economics)
Marks: 20
The Case:
Norway has the second highest GDP per-capita and enjoys fourth highest GDP
per capita (in terms of Purchasing power (PPP)) in the world. Norway is
considered the second wealthiest country in the world in monetary value. It has
largest capital reserve per capita of any nation. The standard ofliving in Norway
is among the highest in the world. Unemployment rate in Norway is very low;
currently it is 3.0%.It is richly endowed with natural resources including
hydropower, petroleum, fish, forests and minerals. In 1960s large reserves of
petroleum and natural gas were discovered,which led to a boom in the economy.
Export revenues of Norway from oil and gas have been raised to almost 50% of
total exports. Norway is the fifth largest oil exporter and third largest gas exporter
in the world. Suppose in year 2011, Norway’s saving was characterized by the
equation, S = -200 + 0.40Y. Government expenditures were Rs.240 million and
total investment was about Rs.110 million and Taxes are Rs.290 million. At that
time, Norway paid Rs.150 million as import payments and earned Rs.230 million
as export revenues.
Requirement:
With the help of above information, calculate the following for Norway’s economy
for the Year 2011.
a. Equilibrium Output Level with the help of injections leakages method.
b. Saving level.
c. Consumption level
d. Average propensity to consume (APC)
e. Average propensity to save (APS)
Marking Scheme:
Part a, b, c, d, e:(Marks: 6+4+4+ 3+3)
