Case Study – macroeconomics

Learning Goal: I’m working on a macro economics case study and need an explanation and answer to help me learn.

Q1: What should be taxed – Personal Income or Personal Consumption and why? Provide your opinion based on the case given above. (Minimum 200 words).

Q2: How may it affect Saudi Economy if an income tax is imposed in KSA?(Min 200 words)?



Q3: In each of the following cases, determine how much GDP and each of its components is affected? ( full answers )

  • a) – Ahmad spends $300 to buy his dinner at the finest restaurant in Boston.
  • b)- Abdul spends $1500 on a new laptop to use it in his software company in KSA. The laptop was built in China.
  • c)- Jane spends $1200 on a computer to use in her editing business. She got last year’s model on sale for a great price from a local manufacturer.
  • d)- General Motors builds $500 million worth of cars, but consumers only buy $470 million worth of them.
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