Midterm Exam (Introduction to Economics)
- The economy of Bangladesh produces three goods: Orange, Apple and Banana. The accompanying table shows the output and prices for years 2019, 2020, and 2021.
| Year | Orange | Price ($) | Apple | Price ($) | Banana | Price ($) |
|---|---|---|---|---|---|---|
| 2019 | 4200 | 7 | 5600 | 4 | 12000 | 3 |
| 2020 | 4400 | 8 | 6500 | 6 | 11500 | 4 |
| 2021 | 5500 | 11 | 6400 | 7 | 14300 | 5 |
Calculate Nominal GDP, Real GDP, and GDP deflator and Economic growth for year 2019, 2020, 2021 by using 2019 as the base year.
Illustrate how each of the following would effect the U.S. PPF: (a) an increase in the number of illegal immigrants entering the country, (b) a war that takes place on U.S. soil, (c) the discovery of a new oil field, (d) a decrease in the unemployment rate, and (e) a law that requires individuals to enter lines of work for which they are not suited.
Explain graphically the law of demand curve is downward sloping.
Explain the circular model of the Economy where income always equal to expenditure