Question

In: Economics

Durable goods &n

Durable goods 400

Non-resident investment 300

Federal purchase of goods 300

Exports 500

State and local purchases of goods 250

Residential investment 5

Imports 150

Change in business inventories -25

Nondurable goods 600

Depreciation 50

Net factor income from abroad 30

Determine:

i) Personal consumption expenditures

ii) The value for gross private domestic investment

iii) The value of Net Exports

iv) The value of government spending in

v) The value of gross domestic product (GDP)

vi) The value of GNP

vii) The value of NNP

2. In an economy, Y (national income) + C (Consumption) + I (investment). If consumption + $50m + 0.75Y, planned investment = $180m and national income = $800m, realised investment will be:

$50m

$100m

$200m

$300m

Expert Solution

(i)
Durable goods	400
Nondurable Goods	600
Personal Consumption Expenditure	1000

(ii)
Non-residential Investment	300
Residential Investment	5
Change in Business Inventories	-25
Gross Private Domestic Investment	280

(iii)
Export	500
Import	150
Net Export=Export-Import	350

(iv)
Federal Purchase of good	300
State and Local Purchase of good	250
Government Spending	550

(v)
C	1000
I	280
G	550
NX	350
GDP=C+I+G+NX	2180

(vi)
GDP	2180
Net Factor Income from abroad	30
GNP=GDP+NFIA	2210

(vii)
GNP	2210
Depreciation	50
NNP=GNP-Depreciation	2160

===============================================================

2.

The economy is given as

For Y=800,

Then planned investment $180 and inventory investment -$30 and realised investment $150.

Rahul Sunny answered 9 months ago

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