Instructions – PLEASE READ THEM CAREFULLY Instructions – PLEASE READ THEM CAREFULLY

Instructions – PLEASE READ THEM CAREFULLY

Instructions – PLEASE READ THEM CAREFULLY

Any matched results will be considered cheating, so it results into ZERO grade.

Show all works for calculation, final result will not be accepted without showing how you reach to it.

NO LATE ASSIGNMENT WILL BE ACCEPTED UNDER ANY CIRCUMSTANCES.

YOU CAN NOT USE ANY OUTSIDE RESOURCES FOR HELP ON THE ASSIGNMENT & IF YOU HAVE ANY QUESTION,

The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.

Assignments submitted through email will not be accepted.

Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.

Students must mention question number clearly in their answer.

Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.

All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).

Submissions without this cover page will NOT be accepted.

Question 1 (4 points) Assume we have a closed economy, the data you go over it on discussion 1 (table 17) show the following information for the first quarter of 2021 (assume export = import = net export = 0):

National income (excluding net export) = 540,170,656,840 SAR.

Consumption equal 240,691, 239,879 SAR.

Government expenditures equal 139,731, 741,344 SAR.

Assume that the consumption tax rate is 15% (Value Added Tax) and investment 20% for capital. Solve for the following (parts a to e) if Saudi Arabia is considered a closed economy:

Tax revenue Hint, there are two types of tax; sales tax (VAT) and capital or investment. First, calculate investment to find tax revenue from investment. Add these two together.

Investment.

Private saving.

Public saving and what kind of budget does Saudi Arabia have.

National saving.

On a few words; explain how the government could increase investment level using fiscal policy.

Question 2 (1 point) Show how national saving equal investment and NCO using national income identity formula for open economy.

Question 3 (1 point) The price of the Big Mac meal in Saudi Arabia costs 27 SAR and it costs 2.384 KD in Kuwait, the nominal exchange rate is 0.08 KD per one SAR. Calculate the real exchange rate? Show if the PPP apply between Saudi Arabia and Kuwait?

Question 4 (1 point) According to table 17; Saudi’s GDP on the third quarter of 2018 is 661,934,293,980 SAR, consumption is 224,534,925,365 SAR, government expenditure is 138,554,191,315 SAR, Investment is 144,740,343,285 SAR. Calculate net export.

Question 5 (1 point) What happen to Saudi Arabia’s GDP when average income in Bahrain increases? Answer this question according to the demand side.

Question 6 (1 point) one of the six debates of the macroeconomic policy is:

Should the central bank set zero inflation target?

Briefly Explain this debate.

Question 7 (1 point) On the first week of the semester, I asked you to write your goal about studying Economic on general and specifically Macroeconomic; did you reach your goal? How? what did you learn about Macroeconomic?