The input-output (consumption) matrix for a closed economy is given below. Solve the associated input- output...

The input-output (consumption) matrix for a closed economy is given below. Solve the associated input- output model. Use r if you need a variable in your answer. [0.07 0.05 0.27] [0.17 0.48 0.19] [0.76 0.47 0.54]

Expert Solution

Answer :-

Total output equals intermediate output plus final output. If we let be the matrix of coefficients , be the vector of total output, and be the vector of final demand, then our expression for the economy becomes

which after re-writing becomes . If the matrix is invertible then this is a linear system of equations with a unique solution, and so given some final demand vector the required output can be found. Furthermore, if the principal minors of the matrix are all positive the required output vector is non-negative.

Colby Messinger answered 2 years ago

Suppose a closed economy has a consumption-output ratio of 0.8. Total output is 1 Billion in...

Suppose a closed economy has a consumption-output ratio of 0.8. Total output is 1 Billion in 2018 and the capital stock equals 5 Billion. It's depreciation rate and population growth rate are both equal to 2%. What is true in 2019? income will have grown consumption will take an even larger share of output we do not have enough information to calculate changes from 2018 to 2019 the capital stock must be smaller than in 2018

Assume that GDP (Y ) is 5,000 in a closed economy. Consumption (C) is given by...

Assume that GDP (Y ) is 5,000 in a closed economy. Consumption (C) is given by the equation C = 1,200+0.3(Y −T)−50r, where r is the real interest rate, in percent. Investment (I) is given by the equation I = 1, 500 − 50r. Taxes (T ) are 1,000, and government spending (G) is 1,500. (a) What are the equilibrium values of C, I, and r? (b) What are the values of private saving, public saving, and national saving? (...

Question 1. In a closed economy, the consumption function is given by C = 200 +...

Question 1. In a closed economy, the consumption function is given by C = 200 + 0.75(Y-T). The investment function is I = 200 – 25r. Government purchases and taxes are both 100. The money demand function in the economy is (M/P)d = Y – 100r. The money supply M is 1,000 and the price level P is 2. a. Derive the equations of IS and LM curves. b. Find the equilibrium interest rate r and the equilibrium level of...

Suppose a closed economy has an aggregate consumption function given by C = 200 + 0.50Yd and generates $2400 output and income in equilibrium

2Suppose a closed economy has an aggregate consumption function given by C = 200 + 0.50Yd and generates $2400 output and income in equilibrium. Suppose also that the government collects a lump-sum tax of 100.How much will the private sector be saving total in equilibrium?3Suppose a closed economy generates $2500 output and income in equilibrium. Suppose also that the government spends 350 and imposes a lump-sum tax of 100.By how much is the government in deficit?

The input-output matrix for a simplified economy with just three sectors (agriculture, manufacturing, and households) is...

The input-output matrix for a simplified economy with just three sectors (agriculture, manufacturing, and households) is given below. Agriculture Manufacturing Households Agriculture Manufacturing Households 0.29 0.44 0.105 0.12 0.11 0.115 0.76 3.53 0.123 A. How many units from each sector does the agriculture sector require to produce 1 unit? The agriculture sector requires _____units from agriculture, ____units from manufacturing, and ___units from households. B. What production levels are needed to meet a demand of 32 units of agriculture, 34 units...

The input-output matrix for a simplified economy with just four sectors (natural resources, manufacturing, trade and...

The input-output matrix for a simplified economy with just four sectors (natural resources, manufacturing, trade and services, and personal consumption) is given below. Suppose the demand (in millions of dollars) matrix is matrix D given below. Find the amount each sector should produce. Natural nbsp Resources nbsp Resources nbsp Manufacturing nbsp Manufacturing nbsp Trade and nbsp Trade and Services Personal nbsp Consumption nbsp Consumption Upper D equals Start 4 By 1 Table 1st Row 1st Column 451 2nd Row 1st...

V+Consider a closed economy with fixed prices and wages. Suppose the consumption function is given by...

V+Consider a closed economy with fixed prices and wages. Suppose the consumption function is given by ? = 50 + 0.5? ? where C is consumption and ? ? is disposable income. The investment function is given by ? = 30 − 5? where I is investment and r is the interest rate. The demand for money is given by ?/? = 200 + 2? − ℎ? where M is the amount of money demanded, P is the price level,...

In a closed economy, given the following: The consumption function C = 0.8(1 – 0.25) Y...

In a closed economy, given the following: The consumption function C = 0.8(1 – 0.25) Y + 12 The average tax rate t = 25% The level of private investment I = 26 The level of government spending G = 14 Where Y is the national income. Calculate the equilibrium level of income and output in the economy. Calculate the expenditure multiplier and show the effect of an increase in government spending and an increase in private investment. Given the...

A closed economy has full employment output of 6000. Government purchases, G, are 1200. Desired consumption...

A closed economy has full employment output of 6000. Government purchases, G, are 1200. Desired consumption and desired investment are: Cd= 3600 - 2000r + 0.10Y, and Id = 1200 - 4000r where Y is output and r is the real interest rate. a. Find an equation relating desired national saving, Sd, to r and Y. b. Using the goods market equilibrium condition, find the real interest rate that clears the goods market. Assume the output equals full-employment output. c....

Find a real Leontief Input-output matrix for a country and explain about the matrix?

Question