Answer the FF. questions

1. Describe the basic features of the circular flow model

2. Assume the following annual information about a hypothetical country - Redland for 2020 (figures are in billions of dollars).

Transfer payments	$80
Government purchases	250
Personal taxes	140
Corporate income taxes	20
Indirect taxes less subsidies	40
Undistributed corporate profits	70
Net income of farm and unincorporated business	160
Wages, salaries, and supplementary labour income	480
Personal consumption expenditures	500
Capital consumption allowance	100
Exports	360
Profits of corporations and government enterprises before taxes	120
Interest and investment income	50
Dividends	30
Imports	310
Gross investment	150
Net investments from non-residents	60

a. Using this data, compute GDP for Redland by both the expenditure and income methods. (6 points)

b. Calculate the real GDP for Redland assuming that the CPI was 107 in 2020. (2 points)

c. If real GDP of Redland in 2019 was $995 billion, calculate the growth rate of its GDP . (2 points)

d. Calculate the numbers of years needed for Redland to double its GDP ? (2 points)

3. Identify at least four transactions which are not included in the GDP calculation.

4. Explain the determinants of a country's productivity. Describe ways in which a government policymaker can try to raise a country's productivity.