ECO403 GDB # 01 Solution Spring 2013

Total Marks20Starting DateFriday, May 10, 2013Closing DateTuesday, May 14, 2013StatusOpenQuestion/Description
The Case:
MAGA-DEVELOPER is one of the top leading Bungalows constructing companies in Singapore. Directly and indirectly MAGA-DEVELOPER accounts for 27% of Gross Domestic Product, 40% of exports, 15% of imports and employs 17% of the total labor force. It has been observed that people of this country have started preferring bungalows over flats from last few years. They are using bungalows not only for residences but also for offices, hotels, galleries, spas and restaurants. To meet higher demand, suppose the managing directors have decided to build one thousand bungalows in first phase. For the construction of 1000 bungalows, the said company has taken three major actions. First, company has purchased 80% material domestically while 20% material is imported from Japan and China. Second, to materialize the project, company has hired more workers on attractive salaries and increased salaries of existing workers to increase their efficiencies. Third, company has got relaxation on electricity charges from the government.


Requirement:
Keeping in mind the above situation, analyze how the above stated actions taken by MAGA-DEVELOPER will affect overall consumption level of people of this country.

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