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

Solutions

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.


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