Question
In: Economics
when wages and salaries account for 75% GDP and consumption spending is 65% of the GDP,...
when wages and salaries account for 75% GDP and consumption spending is 65% of the GDP, what does that mean? if these numbers go higher, what is the implication?
Solutions
Expert Solution
It means that consumption spending being 65% and wages being 75% tells about the spending rate or savings rate of the people where it has to be observed that the spending rate is very high where the savings rate is a bit low when compared to that of countries like China.if the numbers increase, then it means spending increases with the increase in the wages and salaries and they were likely to occupy huge share of the GDP on the whole.
Rahul Sunny answered 2 years agoRelated Solutions
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Please find the upper bound of the above set:
Assume that when an economy has a GDP of $500, Consumption is $550. The MPC is...
Assume that when an economy has a GDP of $500, Consumption is
$550. The MPC is .75. Investment is 25. Government Spending equals
$50. Begin the problem by completing Income/Consumption
Schedule:
GDP=DI
Consumption
Investment Government
$500
$550
$25
$50
600
700
800
900
1000
1100
Graph the Consumption Function.
Add Investment to the graph.
Add Government Spending to the graph.
What is the multiplier? (Use the formula discussed in your
text.)
What...
Assume that when an economy has a GDP of $500, Consumption is $550. The MPC is...
Assume that when an economy has a GDP of $500, Consumption is
$550. The MPC is .75. Investment is 25. Government Spending equals
$50. Begin the problem by completing Income/Consumption
Schedule:
GDP=DI
Consumption
Investment
Government
$500
$550
$25
$50
600
$550+75= 625
$25
$50
700
$625+75=
700
$25
$50
800
700+75=
775
$25
$50
900
775+75=
850
$25
$50
1000
850+75=
925
$25
$50
1100
925+75=
1000
$25
$50
Graph the Consumption...
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