Consider the following information on macroeconomic variables in a closed economy of Winterland (all figures are in billion $):

C=160 + 0.6 YD

I=150

G=150

T=100

1. Identify the exogenous and endogenous variables in this model.
2. Obtain the equilibrium level of GDP?
3. Using the equilibrium GDP in b, obtain the equilibrium level of consumption spending.
4. How much is the savinglevel at the equilibrium?
5. Calculate the multiplier?
6. If government purchase of goods and services (G) increase by $50 billion, how much the equilibrium level of GDP (Y) will change?
7. If government taxes (T) increase by $50 billion, how much the equilibrium level of GDP (Y) will change?

Raines Umbrella Corp. had sales of $608,674. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $547,602, $89,764, and $80,449, respectively. In addition, the company had an interest expense of $85,353 and a tax rate of 31 percent. (Ignore any tax loss carryback or carryforward provisions. This means that if the company does not have any taxable income, they do not pay any tax.) Suppose Raines Umbrella Corp. paid out $52,441 in cash dividends. If spending on net fixed assets and net working capital was zero, and if no new stock was issued during the year, what is the net new long-term debt?

d) Explain the effect of an expansionary monetary policy on real physical output, employment and inflation given that economy in Zambia is operating at potential output level. [6 Marks]

e) Use the aggregate demand and the 45-degree line to represent equilibrium in the goods market. Make sure to include intercept, and slope in your graph. Further assume that interest rates decrease, show the effect of decreased interest rates on equilibrium income. Explain the stage economy goes through in moving from one equilibrium to point to another. [10 marks

] f) Explain what determines consumption spending in Zambia. [6 marks] [Total 40 Marks

discuss the process through which an individual's demand curve can be developed and then how a market demand curve can be determined. This involves utility, marginal utility, and indifference curves. Be sure to discuss the process (equating the marginal utility per dollar spent across goods consumed) a consumer uses to achieve maximum satisfaction in consumption aka as the rational spending rule and the concept of diminishing marginal utility (this marginal comparison process is the heart of much of economics). Also be sure to discuss the difference between the income and substitution effect that takes place when the price of good changes (use a good that you consume as an example in your discussion).

Part 1: Expenditures Approach to Calculating GDP (weight 25% of the assignment grade) Complete the following exercise Visit the Bureau of Economic Analysis Web site at www.bea.gov In U.S. Economic Accounts under National click on Gross Domestic Product (GDP), then Interactive Tables: GDP and the National Income and Product Account (NIPA) Historical Tables, click “Begin using the data”, and use Section 1 - Tables 1.1.5 and 1.1.6 to identify the GDP (nominal GDP) and real GDP for the past four quarters. a) Present the information that you received in your project as a table. b) Write a report (1 page double - spaced), which contains the analysis of the results you received. In this report consider, but do not be limited to the following: Why was nominal GDP greater than real GDP in each of those quarters? What was the percentage change in Nominal GDP for the most recent quarter compared to the previous quarter? What was the percentage change in Real GDP for the two quarters? What accounts for the difference in the two percentages?

Henry Doyle the president of King’s sugar is evaluating the addition of a new sugar-processing mill, to make white sugar, and eliminate the need to buy white sugar from its competitor, Kennard’s sugar company. King’s sugar makes brown sugar only, but would need a mill to process the brown sugar into white sugar. Kennard’s company produces white sugar from the raw sugar cane. Doyle believes that the new mill will bring in additional revenues and reduce operating costs. The competitor had excess capacity of white sugar that it sells to other sugar mills. Therefore, building the new mill would compete with Kennard’s mill. The new mill will cost $20 million in addition to the working capital requirements. Henry Doyle is wondering whether the investment can be justified. The project is expected to be 6 years until 2025.

The construction of the mill will take two years. $18 million will be spent in 2019, and $2 million in 2020. It is expected that when the plant start operating fully in 2020, the company’s operating costs will be reduced because the savings will be derived from the cost differences of producing versus buying white sugar from Kennard’s mill. The cost savings will be $ 2.8 million in 2020 and $ 3.7 million for the next five years. The company uses 15 % as the cost of capital. The following are the financial projections for the new mill.

Net working capital (10% of incremental sales)

SG&A (5% sales)

Taxes 40%

Answer all of the questions.

1. What is the net present value (NPV) and internal rate of return (IRR) for the investment?
2. What is the payback period of the project?
3. Would you recommend that King’s sugar go ahead with making this investment? Why?

CASE : Manuel Market opens first branch in Riyadh

Manuel Market, a Jeddah-based supermarket retailer, opened its first branch in Riyadh on Feb. 26, 2020.

The ninth and newest Manuel Market, located in Riyadh-Mercato, Prince Muqrin bin Abdul Aziz Street, An-Nuzhah district, aims to provide customers a luxurious shooping experience, the best service, and the finest healthy, natural and organic products at reasonable prices. The opening ceremony was attended by Khaled Al-Darwish, CEO of Manuel Market; Abdulelah Al-Darwish, chairman; Abdullah Al-Darwish; Abdulrazzaq Al-Darwish, general manager; Faisal Al-Darwish, deputy general manager; a group of businessmen and media representatives; and a gathering of Manuel’s customers.

The supermarket chain, which opened its first branch in Jeddah in 2010, currently has seven branches in Jeddah, one in Jubail and one in the Saudi capital.
CEO Al-Darwish said: “The Manuel Market chain offers the best and widest selection of consumer goods and food products of the most famous global brands. In addition to being a leader in the field of organic and healthy natural foods, Manuel provides its customers with outstanding national and international product options under one roof.”
One of the most important goals of Manuel, Al-Darwish said, is to “make a positive difference in people’s lives by paying attention to their passion, understanding their needs, and meeting their aspirations.” He also reiterated Manuel’s commitment to developing and improving service levels to meet the demands of its customers.

Question: Suggest your strategies to differentiate Manuel Market from other super markets in Riyadh

the question: Recently, there was a price increase in petrol fuel and cigarettes in the UAE. Suppose the prices of both of these goods rose by 15%, for which good does the quantity drop the most? why? use economics terminologies to explain.

Why are the following business processes important? Which process do you feel is most important? Explain your reasoning.

Strategy development

Product development

Systems to produce goods and services

Order fulfillment