Question 4) (15 Marks)

Consider the information below for Country G and answer the questions:

Country G		2025	2026
Consumption Spending		91	79
Fixed Investment spending		28	20
Government spending		31	35
Government investment		3	6
Export		20	21
Import		21	19
Depreciation expenditures		5	6
Saving		4	4
Transfer payments		65	72
Tax receipt		105	99

Q4 a)Calculate the GDP for the year 2025 and 2026. (3 mark)

Q4 b)Calculate the government budget for the year 2025 and 2026. (3 mark)

Q4 c)What are the key economic problems Country G faces in 2026? (4 marks) List and report on the Key Macroeconomic variables performance. If so, what type of discretionary fiscal policy would Country G undertake?

Q4 d)How does fiscal policy affect the components of aggregate demand? (5 marks or 0) Refer to Q4 c):How could the policy affect the AD or SAS or LAS curve in the AD/AS Model.

[Answer and show workings here]

Q4 a)

GDP for 2025=

GDP for 2026 =

Q4 b)

Balanced Budget in 2025: Budget = Surplus or Deficit] (Type the correct answer)

Q4 c)

-The key economic problem for Country G is: =

-List & report on theKey economic variables' performance: List & report on Key economic variables:

Types offiscal policy: Expansionary or Contractionary] (Typethe correct answer)

Answer Q4 d)

-Which Components of AD areaffected by fiscal policy?

[ADComponents: ]

Refer to Q 4d): How could the policy affect the AD or SAS or LAS curve in the AD/AS Model.

AD curve: shift left / remain unchanged / right [Type the correct answer)

SAS curve: shift left / remain unchanged / right [Type the correct answer) LAS curve: shift left / remain unchanged / right [Type the correct answer)