Question

Question 1:
Use the following information about the economy of Guyana in 2018 to answer the below question (NOTE - values are in Guyanese dollars):

2018 GDP - $689 billion

2018 Taxes - $117 billion
2018 Investment - $345 billion
2018 Government Spending - $144 billion
2018 Consumption - $454 billion

What was the value of net capital inflow in 2018? (You can assume no transfer payments.)

(Answers should be in the form "Z billion." Just enter "Z.")

Question 2:
In November, 2019, the IMF announced that it believed Guyana could see economic growth of 86% in 2020 (this was before the current crisis), driven by its new discovery of oil and creation of an oil export sector. The Bank of Guyana therefore expected the overall price level to _____.

However, one of the Bank of Guyana's stated policy objectives is stable prices. As a result, it was anticipating conducting _____ monetary policy.
       
a) fall; contractionary
b) fall; expansionary
c) rise; contractionary
d) rise; expansionary
Question 3:
Use the following information about the economy of Guyana in February 2020 to answer the below question (NOTE - values are in Guyanese dollars):

Deposits in checking accounts - $133 billion
Deposits in savings accounts - $210 billion
Deposits in other, illiquid accounts - $112 billion
Small time deposits - $9 billion
Currency - $116 billion
Bank reserves - $92 billion

What is the size of the monetary base in Guyana for February 2020?

(Answers should be in the form "Z billion". Just enter "Z".)

Answer 1

Q(1)

So if we have to calculate the value of net capital inflow then we have to look at total saving in that nation and the amount of investment they have because capital inflow is define as the amount of investment that a country have from foreign countries, and subtracting the saving the people have in that nation

so mathematically

Net Capital Inflow = Investment - saving

where

Saving = GDP -  Government Spending - Consumption

Therefore the formula will be

Net Capital Inflow = Investment - (GDP -  Government Spending - Consumption)

on putting value in the above formula, we can have

Net Capital Inflow = $345 - ($689 - $144 -  $454)

Net Capital Inflow = 254

Q(2)

So as per the IMF prediction, there seems to be a growth in the country that means now people will have more money than they usually have and that will create a huge demand in the nation which will ultimately raise the price level in the economy and again as the bank has stated policy objectives of maintaining stable prices thus the country can anticipate a contractionary monetary policy to maintain the same objective of the bank

Answer - rise; contractionary

Q(3)

So to determine the size of the monetary base in the country we have to look at all the deposit and the most liquid monetary currencies available in the country

Answer -

Monetary size =  $133 + $210 + $112 + $9 + $116 + $92 = $672