Take-home Assignment 1
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This take-home assignment includes 8 questions. The first 6 questions are COMPULSORY and
worth 100 points in total. Question 7 and 8 are OPTIONAL and worth 40 points in total. These two
are challenging questions and included as bonus points to give you a chance to aim at a higher
overall grade for the course.
You need to submit answers as a WORD or PDF file for this assignment online on Blackboard. The
deadline is at 23:59 Sunday, April 14th.
There is a penalty of 10% of the assessed grades for each day of late submission.
Understand that International University treats plagiarism seriously, so be sure to avoid
plagiarizing your report or enabling the plagiarism of another student’s report. You can find writing
tips in the next section to avoid committing plagiarism.
Writing tips to avoid plagiarism:
All forms of plagiarism and unauthorized collusion are seriously regarded and could result in severe
penalties. Plagiarism occurs when students copy or reproduce people’s words or ideas and then
present them as students’ own work without proper acknowledgement, including when students
copy the work of their fellow students.
Plagiarism in student submissions can be detected by:
• Web-based programs such as SafeAssign or Turnitin, or,
• Lecturer's judgments with evidence of originals.
Writing tips: You can increase your originality by using some strategies:
• Developing the answer with your own words.
• Replacing direct quotes (texts between quotation marks “”) with their paraphrases in your
own words.
• Revising all paraphrases which are too similar to the original.
• Summarizing the original sources, rather than paraphrasing them.
• Adding your elaborations and/or interpretations of the original source.
• Do not allow your fellow students to completely copy your works.
Question 1 (20 points):
The figure below shows a simplified circular-flow diagram for the economy of Đại Việt (a fictional
country) in 2020 at current prices. (Note that there is no investment in Đại Việt.)
a. What is the value of net exports?
b. Does the total flow of money out of households—the sum of taxes paid and consumer
spending—equal the total flow of money into households?
c. What is the value of GDP in Đại Việt?
d. In 2021, GDP of Đại Việt at current prices is 800. What is the real GDP growth rate of Đại
Việt?
e. How does your answer change if we know that the GDP deflator of 2021 is 5% with using
2020 as the base year?
Question 2 (10 points):
One person looks at the world nominal GDP ranking and compare the sizes of the economies of
India and Singapore. He notices that India belongs to the top 10 biggest economies in the world,
while Singapore is a much smaller economy. However, he also observes that some Indian citizens
want to immigrate to Singapore to enjoy a higher living standard. Using your knowledge gained from
the first three topics of the course, can you explain why this immigration trend happens for Indian
citizens? Which factors of the economy contribute to the higher living standard of Singaporeans
compared to Indians. Limit your answer to less than 200 words.
Question 3 (20 points):
One wants to ask whether the cost of living of students in Ho Chi Minh city increases faster or
slower than the official inflation rate from the government. The table below shows the costs
experienced by an average university student in the city during the academic year that began in
2021 and the academic year that began in 2022.
a. Calculate the cost of living for an average student for 2021 and 2022.
b. Calculate the inflation rate for an average student between 2021 and 2022.
c. Compare the student’s inflation rate and Vietnam’s general rate, and make your comments.
Note: you need to look for the national rate yourself from prestigious sources, such as:
World Bank or IMF or the General Statistical Office of Vietnam.
Unit: VND Tuition fee Accommodation Other expenses
2021 30 mil 36 mil 48 mil
2022 33 mil 42 mil 50 mil
Question 4 (15 points):
Are the following cases more likely to experience short-term unemployment or long-term
unemployment? Briefly explain.
a. A farming worker who is laid off because of bad weather leading to poor harvest.
b. An unskilled worker in a garment factory who lost his job because low world export
demands forced his company to cut half of its workforce.
c. An expert welder, who took years of training and practicing mastering his skills, with little
education loses his job when the company installs automatic welding machinery. It is the
general trend of the industry.
Question 5 (15 points):
In a closed economy (𝑁𝑋 = 0), the accounting identity of the GDP explains to us that total savings
must always equal total investments. Now under an open economy (𝑁𝑋 ≠ 0) with the following
accounting identity:
𝑌 = 𝐶 + 𝐼 + 𝐺 + 𝑁𝑋
If that country has investments higher its amount of savings, how this country obtains the
necessary resources? Write down the equation (between total savings (S) and other components of
the GDP) to show your answer.
Question 6 (20 points):
Assume that the required reserve ratio for all banks is 15 percent, and banks do not hold excess
reserves, and that the public does not hold any cash. The central bank has decided that it wants to
expand the money supply by $40 million.
a. If the central bank is using open-market operations, will it buy or sell bonds?
b. Explain the mechanism of how this operation (selling/purchasing) increases the money
supply?
c. What is the value of bonds the central bank needs to buy or sell to accomplish the goal?
Explain your reasoning using the money multiplier approach.
BONUS QUESTIONS
Question 7* (20 points):
We learn that gross domestic product (GDP) is one of the key measures of economic activities.
Aside from GDP, gross national income (GNI) is the second most common indicator. The former
limits its scope from the location, the latter limits its scope from ownership. Answer following
questions:
a. Define GNI and contrast it with GDP.
b. Using the website General Statistics Office of Vietnam at
https://www.gso.gov.vn/en/national-accounts/, collect the ratio (%) between GNI over GDP
at current prices for the 2000-2022 period, and draw a graph of the data over time.
c. Use your knowledge from the course to explain the trend of the ratio.
Question 8* (20 points):
The table below provides the minimum monthly wage of Vietnam1 for the 2015-2023 period. This
question asks you to compute real minimum wage growth and compare it with changes of living
standards in Vietnam. To achieve this, you need to perform the following steps:
a. Collect CPI data of Vietnam over the same period from prestigious sources (World Bank,
IMF, or General Statistics Office of Vietnam) and compute the growth rates of the real
minimum wage.
b. Collect GDP-based data that track the improvement of living standards of Vietnam.
c. Compare the two obtained data and make your comments.
Note: you can present your collected data by using tables or graphs.
2015 2016 2017 2018 2019 2020 2021 2022 2023
Minimum wage (mil VND per month)2 3.10 3.50 3.75 3.98 4.18 4.42 4.42 4.42 4.68
1
Companies may not necessarily pay the actual wages because they can ask their workers to work overtime
to achieve higher incomes.
2
Vietnam has different minimum wages applied for different regions. These numbers in the table are for big
cities and key industrial provincial districts.
