At the end of the first year of the new Shire reckoning, which began with the return of the Hobbits, the following data had been gathered:
Farmer Sadoc Baggins, a remote cousin of Frodoâs, had produced 150 Shire dollars worth of potatoes, the sweeter crop that can only be grown in the sandy soils of Hobbiton. He had sold 50 Shire-dollars of potatoes to the Green Dragon, the only pub in Hobbiton, 50 Shire-dollars at the farmerâs market to the sturdy Hobbit folk of Hobbiton, and potatoes for 30 Shire-dollars were shipped to Bree outside the borders of the Shire. The rest was stored for the winter.
The Green Dragon had sold 70 Shire-dollars worth of hearty mashed potatoes, and 40 Shire- dollars of brew, which the old Rufus Bracegirdle, its proprietor, had acquired from Bree for only 20 Shire-dollars. Rosy, the waitress, had been paid 20 Shire-dollars as salary.
Sam himself had ordered the establishment of a police force in Hobbiton, knowing full well of the dangerous folk that were roaming the borders of the Shire, lost remnants of the servants of the Dark Lord. Daffodil Burrows and Doderic Bolger, the two new policemen, were paid 20 Shire-dollars each. Sam instituted a lump sum tax to cover for that.
Based on the aforementioned information, answer the following:
a) What are the net exports in Hobbiton, what are the net factor payments with abroad?
b) National accounting is a piece of magic, and like all things magic it is related to the number three: three ways to the goal. Using these three ways, explain Sam in detail what Hobbitonâs GDP was in the first year of the Shire reckoning. Keep in mind that the mayor has never heard about this magic, so you will have to be very pedantic! Make sure he does not confuse the three ways.
c) What is national saving in Hobbiton as a percentage of GDP, i.e. the savings rate?
d) Would your answer to 2) change, if Sam was simultaneously the mayor, the farmer (he, after all, is quite an accomplished gardener) and the proprietor of the Green Dragon?
e) Would your answer to 2) change, if you had also data on the gifts that the hobbits gave away to their neighbors on their birthdays, usually small items of mixed usefulness. Remember: Hobbits give gifts on their own birthdays.
f) For the second year of the new Shire reckoning, GDP is found to be 200 Shire-dollars. Does that necessarily mean that Hobbiton is worse off?
At the end of the first year of the new Shire reckoning, which began with the return of the Hobbits, the following data had been gathered:
Farmer Sadoc Baggins, a remote cousin of Frodoâs, had produced 150 Shire dollars worth of potatoes, the sweeter crop that can only be grown in the sandy soils of Hobbiton. He had sold 50 Shire-dollars of potatoes to the Green Dragon, the only pub in Hobbiton, 50 Shire-dollars at the farmerâs market to the sturdy Hobbit folk of Hobbiton, and potatoes for 30 Shire-dollars were shipped to Bree outside the borders of the Shire. The rest was stored for the winter.
The Green Dragon had sold 70 Shire-dollars worth of hearty mashed potatoes, and 40 Shire- dollars of brew, which the old Rufus Bracegirdle, its proprietor, had acquired from Bree for only 20 Shire-dollars. Rosy, the waitress, had been paid 20 Shire-dollars as salary.
Sam himself had ordered the establishment of a police force in Hobbiton, knowing full well of the dangerous folk that were roaming the borders of the Shire, lost remnants of the servants of the Dark Lord. Daffodil Burrows and Doderic Bolger, the two new policemen, were paid 20 Shire-dollars each. Sam instituted a lump sum tax to cover for that.
Based on the aforementioned information, answer the following:
a) What are the net exports in Hobbiton, what are the net factor payments with abroad?
b) National accounting is a piece of magic, and like all things magic it is related to the number three: three ways to the goal. Using these three ways, explain Sam in detail what Hobbitonâs GDP was in the first year of the Shire reckoning. Keep in mind that the mayor has never heard about this magic, so you will have to be very pedantic! Make sure he does not confuse the three ways.
c) What is national saving in Hobbiton as a percentage of GDP, i.e. the savings rate?
d) Would your answer to 2) change, if Sam was simultaneously the mayor, the farmer (he, after all, is quite an accomplished gardener) and the proprietor of the Green Dragon?
e) Would your answer to 2) change, if you had also data on the gifts that the hobbits gave away to their neighbors on their birthdays, usually small items of mixed usefulness. Remember: Hobbits give gifts on their own birthdays.
f) For the second year of the new Shire reckoning, GDP is found to be 200 Shire-dollars. Does that necessarily mean that Hobbiton is worse off?
