In the economy, the business cycle is a normal occurrence. It is typically explained as consisting of a series of expanding, contracting, and recovering stages. Expansion, peak, recession, depression, trough, and recovery are the six stages.
Expansion: an increase in output and employment, which...
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, lOMoARcPSD|25973474
Muhannad Walid – u18104604
Assignment 1
1-In the economy, the business cycle is a normal occurrence. It is typically explained as
consisting of a series of expanding, contracting, and recovering stages. Expansion, peak,
recession, depression, trough, and recovery are the six stages.
Expansion: an increase in output and employment, which leads to an increase
in household and company earnings and spending.
Peak: When economic growth temporarily peaks, unemployment is low and
inflation is high.
Recession: induce a decline in consumer spending and company investment,
which will result in job losses and a reduction in economic production.
Depression: Anxiety and depressive symptoms were more common in
manufacturing workers.
Trough: Before a rise, activity is bottoming, or prices
are bottoming. Recovery: severe reductions in output
and employment,
2-As an economist, your job is to predict when the next crisis will occur or what
you should do when one occurs. Additionally, one must adhere to the five processes
of problem definition, idea generation, selection and implementation of a solution,
and analysis of results.
As a mechanic he will check each part of the car because a lot of cars have the same
products and parts inside so he must check each part to find to problem and solve it
3- Everyone must be selfish in nature, and collectively this leads to the greater
good for society
Everyone must have complete information about the goods or services
they consume.
The first assumption is completely valid because Profit maximization
is attained from the production side and consumer pleasure is maximized when
items are produced with an efficient quality at a competitive price, but the
second assumption is not.
• First, calculate GDP using the factor income approach.
(360000 x 10.85) + (135000 x 22) = 6876000
Now we will use the value-added approach to calculating GDP.
• What is the total value added by the coconut factories?
Because there are no intermediate goods, the value added is
simply the total sales:
Added value = 432000 x 9 = 3888000
• What is the total value added by the pie factories?
Value added = (252000 pies)
($18/pie) – (144000 lbs ingredients)
($4/lb)
- (108000 coconuts)($9/coconut) = 2988000
• What is the GDP?
GDP = sum of value added = 3888000 + 2988000=6876000
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