Question

out References Mailings Review View Help Question 6 1 pts In January 2017, the National Retail Federation reported that "Holiday retail sales during November and December increased 4 percent over 2015 to 5658.3 billion." The NRF's chief economist 'noted that average hourly earnings were up in 2016 over 2015 .. home values have also increased and the rising stock market has increased the value of consumers investments Which models of consumption behavior was the economist referring to? Precautionary savings model and Friedman's permanent income model o Keynesian consumption model and precautionary savings model O Keynesian consumption model and Modigliani's life cycle model O Inventory cycle model and Modigliani's life cycle model. Question 7 1 pts A3 pound bag of Florida oranges is sold for $5.00 to JuciCo, a US company that turns them into orange juice. Then JuciCo sells the orange juice to consumers for $10.00. An identical bag of Florida oranges is purchased by Safeway for $5.00, who then sells it for $7 to a consumer. Considering the four above mentioned transactions, how much will GDP change? O 57 O $17 O $27 O $10 ei e

Answer 1

Question 6) Precautionary savings model and permanent income model

There has been a rise in consumption as the average hourly earnings of workers have risen which is a increase in permanent income. Such a link is seen in permanent income model Also the rise in value of consumer's investments counts as increase in permanent income

Question 7)

Change in GDP = Value Added by seller of oranges to Juico and Safeway + Value Added by Jucico + Value Added by Safeway

Change in GDP = ($5 + $5) + ($10 - $5) + ($7 - $5) = $10 + $5 + $2 = $17

Answer = $17