...© 2010 Pearson Education Canada Will the Canadian economy weaken through the next year and shrink, or will it remain strong and expand? To assess the state of the economy and to make big decisions about business expansion, firms use forecasts of GDP. What exactly is GDP? How do we use GDP to tell us whether our economy is in a recession or how rapidly our economy is expanding? How do we take the effects of inflation out of GDP to reveal the growth rate of our economic well-being? And how to we compare economic well-being across countries? © 2010 Pearson Education Canada Gross Domestic Product GDP Defined GDP or gross domestic product is the market value of all final goods and services produced in a country in a given time period. This definition has four parts: Market value Final goods and services Produced within a country In a given time period © 2010 Pearson Education Canada Gross Domestic Product Market Value GDP is a market value—goods and services are valued at their market prices. To add apples and oranges, computers and popcorn, we add the market values so we have a total value of output in dollars. © 2010 Pearson Education Canada Gross Domestic Product Final Goods and Services GDP is the value of the final goods and services produced. A final good (or service) is an item bought by its final user during a specified time period. A final good contrasts with an intermediate good, which is an item that is produced by one firm...
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...AFRB 343 Advanced Financial Accounting 1 Semester 11 2011 / 2012 TUTORIAL: AQUACULTURE QUESTION 1 The data below is related to Aqua Tiger Bhd that cultures and sells tiger prawns as at 1 January 2006: Batch 1 Batch 2 (RM) (RM) Direct labour costs 40,000 10,000 Production overhead 20,000 30,000 Seed stock, fertilizer and chemical 15,000 25,000 Costs to complete the cycle 90,000 100,000 Estimated harvest 10,000 kg 15,000 kg Required: a) Determine the estimated total costs upon completion and estimated profit for each batch if the selling price for the tiger prawns is RM12/kg. b) If provision for batch 1 and batch 2 is RM16,000 and RM8,000 respectively, calculate the value of the closing stock at NRV and at cost 1 QUESTION 2 Marakisa Bhd involves in the aquaculture activities. The company has built 10 ponds and each pond takes 3 months to generate revenues. Therefore allowing Marakisa to operate 4 phases annually. Detail information on the costs and revenues for the year 2006 is as follows: Types of cost Land acquisition Facilities (road and sewage) Ponds, equipment, water pump and generator Direct labour wages Supervisor’s salary Material costs Transportation costs Revenue: Phase 1 Phase 2 Phase 3 Phase 4 Amount (RM) 520,000 15,000 2,540,100 600/month 1,200/month 5,000/month 5% from revenue 575,800 620,300 490,000 680,400 sales i. ii. Additional information: Ponds and other equipment is depreciated at 10% per annum on a straight line basis. A worker is assigned to...
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...INTRODUCTORY MACROECONOMICS BDEK 2203 Name : Amielia Bte Mohd Hanif No. matrix : 840615055270001 Question 1 (a) Cost of living- Price of goods and services required for maintaining an average level standard of living. Cost of living varies from place to place, and from time to time. Standard of living-The financial health of a population, as measured by the quantity of consumption by the members of that population. The measure most frequently used to estimate standard of living is gross national income per capita. One drawback to the standard of living measurement it does not take into account some factors which are important but hard to quantify, such as crime rate or environmental impact. (b) Objectives of macroeconomic policy is to maintain the full employment; increase the growth of national output in term of GDP; keep control the inflation in the acceptable level; induce the Regional Balance of the uneven distribution area and the balance of Trade which is the least objective because it's the government constraint rather than an objective on decision making. (c) The pillars of productivity growth in an economy: * The rate at which the economy builds up its stock of capital. * The rate at which technology improves. * The rate at which workforce quality or human capital is improving. Question 2 Item Amount /Jumlah (Billions of Ringgit/Bilion Ringgit) | ...
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...calculation is used to calculate Cost of Living Index (CLI). What methods of Index Number calculation is used to calculate Cost of Living Index (CLI). ------------------------------------------------------------------------------------------------------------------------------------ Cost of Living Index is a theoretical price index ,or general price index, showing the difference between the living cost between cities. The cost of living for the base city is expressed as 100 , The cost of living in the destination is then indexed against this number .The major cities in India are having cost of living index below the reference cities ,like Delhi having 63 ,Bangalore 62 and Kolkata having 42 in the list. The interpretation is like ,if a city is having CLI as 120 it is 20% more expensive than the base city. So ,on a broader note CLI gives a picture as to how costly a city is compared to other cities. Items contributing to consumer price index are generally: * Food * Clothing * Fuel and Lighting * Housing * Miscellaneous. The Cost of living is indexed because : * CLI numbers are used for adjustment of dearness allowance to maintain the same standard of living. * It helps in framing suitable policies . * It also reveals trends and tendencies . * The numbers are useful in deflating. * Its helps in measuring purchasing power of money. The consumer price index (CPI) is the primary measure of the cost of living. Now to compute the CPI we...
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...Part B Question 1 Figure 1 The circular flow of income (Figure 1) shows connections between different sectors of our economic system. It revolves around flows of goods and services and factors of production between firms and households. Businesses produce goods and services and in the process of doing so, incomes are generated for factors of production such as wages and salaries going to people in work. Injections: The three injections -- investment, government purchases and export. These injection expenditures, like consumption, are used to purchase aggregate production through the product markets. Most importantly, injections add to the total volume of the basic circular flow. That is, they "inject" revenue into the product markets that is used for factor payments and becomes household income. Withdrawals are increases in savings, taxes or imports so reducing the circular flow of income and leading to a multiplied contraction of production (output). (1) Investment (I), Capital spending by firms - e.g. on new technology (2) Government (G), Government expenditure - e.g. on the NHS or defense (3) Export (X), e.g. Overseas consumers buying goods and service Leakages: The three leakages -- saving, taxes, and imports. These leakages, like consumption, are how the household sector divides up or uses its income. Most importantly, leakages subtract from the total volume of the basic circular flow. That is, they "leak" income away from the product markets, making...
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...and GNP is net property income from abroad. The word “gross” in both of these measures of national income, indicates that no account has been taken of depreciation. There are 3 methods of calculating GDP: the product/output method, the income method and the expenditure method. In theory, because they all claim to measure the same aggregate, they should all give the same total. This is shown below in the circular flow of income: However, in practice, this is unlikely to be the case. This is because extremely large sums arising out of millions of transactions paid over different time periods are being dealt with and it would therefore be very unlikely if all 3 measures coincided. The first way of measuring GDP is to add up annually all the value of the goods and services produced in the country, industry by industry. This is known as the output or product method. When accumulating the output of firms, it is crucial to avoid double counting. This occurs because the outputs of some firms are the inputs of other firms causing duplication and an inflated figure for GDP. Double counting can be avoided by either adding together the final value of output produced or by summing the value added at each stage of production. For example, suppose a...
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...responsibilities, and helps align individual goals with organizational goals. Formal performance appraisals also allows for evaluation of the employee’s performance and contribution towards organizational goals. Formal performance appraisals can also be a learning tool for employees and management through the feedback process of the appraisal. During the feedback process, management should express what the employee has done well and they have not. Management should elaborate on ways the employee can improve performance in areas the employee does not perform well at. 2. (11 points) Identify and describe the different reasons for implementing a short-term bonus. Organizations implement short-term bonuses to improve performance, reduce costs, increase motivation and employee buy-in, and to recruit and retain employees with critical knowledge, skills, and/or abilities. Monetary bonuses for performance and completion of organizational goals can motivate employees to perform at higher rates, and help the organization retain vital employees. Organizations can also implement non-monetary incentives that will help improve job satisfaction, retention, and recruitment rates. Organizations can offer work-life initiatives, flexible work hours, and career development programs. 3. (12 points) Define the differences between skill, knowledge and competencies. A skill is something that is learned...
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...economy, the environment and individuals' assessment of their own wellbeing. Knowing how money is earned will give us some insights about the employment condition and other income elements. Also, household expenditure can give us a better understanding in the expenditure structure. To be more specific, we can use the Engel's Coefficient as an example, which as a tool for assessing household expenditure can reflect the living standard. It suggests that a lower proportion of income spent on food indicates a higher standard of living, which is important for wellbeing assessment. Moreover, a thorough investigation into the household expenditure structure also helps us to better analyze people’s behaviors and preferences. However, measurement in income and expenditure is only about people’s financial condition. It only demonstrates people’s material wellbeing. For instance, the monetary numbers do not tell us that people in Beijing is suffering from air pollution. Looking solely at household income and expenditure does not give us any information about people’s living environment, life satisfaction, etc. Household wellbeing is not a simple add up of all the family members’ wellbeing. Like chemicals, the household wellbeing as a whole involves more subtlety. Thus, focusing on income and expenditure is not a reasonable measure for household wellbeing. The sole use of income and expenditure as a tool is not a convincing method. To measure household wellbeing, all the aspects...
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...Measuring the Cost of Living Overview: Last time we discussed the most important measure of economic well-being – real, per capita GDP. Further, if we want to see how our economic well-being is changing over time, we can calculate how real GDP is changing in percentage terms (for example, real GDP grew 4% last quarter). Now, we turn our attention to another important measure of the economy. We want to measure how the cost of living changes over time. The main intuition here is that, over time, peoples’ incomes and the prices of goods and services increase. 30 years ago an ice cream sundae cost $1 and a typical economics professor earned $35,000. Now, a (bad) ice cream sundae costs $4.50 and a typical economics professor earns $70,000. Main Parts of the Notes: 1. How do we measure the cost of living? a. Using the GDP price deflator b. Constructing the Consumer Price Index (CPI) c. Deriving an inflation rate from the CPI 2. How do we adjust for inflation when comparing dollar values over time? Minor Point: What are the weaknesses of the CPI as a measure of the cost of living? Measuring The Cost of Living: There are two broad measures of the cost of living: the GDP price deflator and the CPI. Both measures move together, so they paint a similar picture of the cost of living. We will briefly discuss the GDP deflator first, and then move on to the more important CPI. GDP Price Deflator: Last time we saw...
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...do” (O’Brien and Pedulla). This plan will encompass many living costs, housing, food, childcare, transportation, health care, along with federal and state taxes. Along with hopefully answering the question, “Does making ends meet include setting aside funds for medical emergency, college tuition, or retirement?” One of the main initiatives of “family budget” is to focus on and understand the geographic difference in the United States. Different states and areas of the country have different living costs and thereby the amount a person needs to live on will change depending where they live. This idea would significantly change how poverty is viewed and ultimately treated. When the geographic budget is found many things are taken into consideration and the percent of each budget will go toward a certain need. For example, in 2008, when San Francisco, California, and Flint, Michigan are compared, it is found that those living in San Francisco spent twenty percent more on housing than those in Flint. Whereas Flint spends more on food, child care, health care and transportation. It is a fascinating study, to see such a difference in one country,...
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...1. Intermediate goods are (a) capital goods, which are used up in the production of other goods but were produced in earlier periods. (b) final goods that remain in inventories. (c) goods that are used up in the production of other goods in the same period that they were produced. (d) either capital goods or inventories. Ans: C 2. The three methods to measuring national income are the (a) cost, income, and expenditure methods. (b) product, income, and expenditure methods. (c) income, output, and expenditure methods. (d) income, cost, and product methods. Ans: C 3. 1983 1984 National income $40000 $48000 Price index 100 125 What is ratio of the national income? A.Fall of 4% C.Fall of 5% B.Rise of 4% D.Rise of 5% 4. Measuring the level and rate of growth of national income is important for seeing: A.The rate of economic growth B.Changes to average living standards C.Changes to distribution of income D.All are correct 5. What is Net property income from abroad? A an aggregate measure of production equal to the sum of the gross values added of all b resident, institutional units engaged in production. B the market value of all the products and services produced in one year by labour and property supplied by the citizens of a country C the income of one or many persons or one or many enteprises after deducting...
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...governments make on the domestic and global economy . Macroeconomics is one of the most important elements of national policy and used as the foundation if any decision regarding taxation or monetary policy concerns. Decisions regarding the balance of payments and interest rates are related to the overall macroeconomics situation of the country. There are many factors used to described macroeconomics and here are a few; Gross Domestic Product, Unemployment Rates and Price Index. Gross Domestic Product (GDP) The GDP is the market value that recognizes the goods and services produced within a period of time, usually this is over a one year period. The GDP is used as an indicator within macroeconomics to show the country’s standard of living. If a country is showing increased improvement and growth in its GDP, that country would be considered as a sign on the economic well-being. The GDP can be determined in three ways, and in principle all three of these ways give the same result; production approach, income approach and expenditure approach. 1. Production Approach – this is the total of all goods and services over a one year period in a country. 2. Income Approach – this...
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...Business Sustainability Alternate measure for Economic Performance Jayant Kumar Preface An indicator is something that helps one to understand inclusive position, the path and how far one is from the point they want to be. A good indicator gives the alert about the problem before it gets too bad and helps to recognize things to do in-order to fix it. Indicators of sustainable community point to areas where the links between the economy, environment and society are weak. It allows one to identify the problematic area and helps the ways to fix restore it. GDP and profit currently dominate society’s discussions of economic performance. They shape the way people think about the economy and business, affecting their behavior and the actual outcomes of economic activity. So what is economic success? Going beyond GDP and profit will explore what we mean by economic success, the role that GDP and profit play in this, and the potential for broader measures of economic success to help us balance our economic priorities, our social goals, and the constraints imposed on us by the natural environment we live in. 1 Current measure of Performance Right measurement is a powerful instrument for social progress; wrong or imprecise measurement a source of hazard and even havoc. Two main measure of economic success are currently are GDP at the national level and profit at the Organizational level. GDP is the value added measure that is broader than Profit. GDP and profit are contested...
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...Automated GSM-Based Weir Monitoring System [pic] _____________________________ A Technical Paper Presented to the Faculty of the College of Engineering and Technology Holy Cross of Davao College _____________________________ In Partial Fulfillment of the Requirements For the Subject CpE Design Projects _____________________________ by Cagulang, Randy Elminero, Ronell Geronimo, Joanna Rhey Mosqueda, Ramil Jr. Engr. Roumel Faustino Adviser November 2011 Chapter 1 The Problem and Its Scope Weir plays a vital role in valuable water resources. In most cases it takes the form of a barrier across the river that causes water to pool behind the structure. This means that it helps alter the flow characteristics of rivers and streams. Without proper monitoring facilities, this may cause floods that may lead to damage to the community. The need for automated performance monitoring systems is increasing as the personnel resources available for dam safety monitoring remains limited. A properly designed and implemented automated monitoring system can save labor and improve the quality of the data and the ability of the person in charge to detect a developing safety condition. According to the Hydrology Department of Henan Province in China (2011), Banqiao Reservoir Dam connected in River Ru in Zhumadian infamously failed in 1975, causes approximately 26,000 people died from flooding. In addition, about 5,960,000 buildings collapsed, and 11 million residents were...
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...CHAPTER 2 : MEASURING NATIONAL INCOME IMPORTANCE & DEFINITION OF NATIONAL INCOME (Gross Domestic Product (GDP)) • Importance – National income accounting measures level of economic production and explain immediate causes of that level of performance. – It compares economic conditions over time. – It provides a basis for formulation and application of appropriate public policies in order to improve economic performance. • Definition – Total market value of all final goods & services produced in a country in 1 year. – It is measured in terms of monetary value. – National income accounting avoids double counting since only final product is being counted. – Higher production indicates greater use of economic resources and as more inputs are used the income for resource suppliers will also increase together with employment opportunities and vice versa. – GDP excludes: ▪ Purely financial transactions (eg: public transfer payments such as pensions, private transfer payments (eg: money gifts and security transactions such as sales of stocks and bonds since they do not involve the actual production of goods and services. ▪ Secondhand sales because they are not current product. CIRCULAR FLOW OF INCOME IN 2, 3 & 4 SECTOR ECONOMY • Circular of income – Referring to Figure 2.1, what is spent on a product being produced is income to those who have contributed their resources to producing and selling it. – Under this we are assuming...
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