An economy is based on three sectors, agriculture, manufacturing, and energy. Production ofa dollar's worth of agriculture requires inputs of $0.30 from agriculture, $0.30 from manufacturing, and$0.30 from energy. Production of a dollar's worth of manufacturing requires inputs of $0.30from agriculture, $0.30 from manufacturing, and $0.30 from energy. Production of a dollar's worth ofenergy requires inputs of $0.30 from agriculture, $0.40 from manufacturing, and $0.30 from energy.Find the output for each sector that is needed to satisfy a final demand of $30 billion for agriculture,$63 billion for manufacturing, and $20 billion for energy.The output of the agricultural sector isbillion dollars.(Round the final answer to three decimal places as needed. Round all intermediate values to sixdecimal places as needed.)

Output for agriculture = ($30 billion)/($0.30) = $100 billionOutput for manufacturing = ($63…

Answered: An economy is based on three sectors,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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There are two countries in the world economy: Home and Foreign. Home has 3000 units of labor available. It can produce two goods, coffee (C) and sugar (S). The unit labor requirement in coffee production at home, aLc, is 4, while the unit labor requirement in sugar production, aLs, is 10. Foreign has a labor force of 1600. Foreign’s unit requirement in coffee production, a*Lc, is 10, while the unit labor requirement in sugar production, a*Ls, is 2. Graph the production possibility frontier for both Home and Foreign. Use C in the vertical axis. What is the opportunity cost of coffee in terms of sugar in both Home and Foreign? Using the information (numbers) provided above, construct the world relative supply curve. Label it RS. The horizontal axis must show the world quantity of coffee relative to the world quantity of sugar, i.e., (Qc+Q*c)/(Qs+Q*s). The vertical axis must show the relative price of coffee with respect to the price of…
In your macroeconomic lectures you are often told that exchange rates and interest rates are important for macroeconomic decision-making. How does an increase in Japan’s government budget deficit affect each of the following? The real interest rate in the short run in Japan. Explain. Private domestic investment in plant and equipment in Japan. Draw a correctly labeled graph of the foreign exchange market for the euro, and show the effect of the change in the real interest rate in Japan from part (a)(i) on each of the following. Supply of euros. Explain. Yen price of the euro To reverse the change in the yen price of the euro identified in part (b) (ii), should the European Central Bank buy or sell euros in the foreign exchang market? Explain.
Q1-5 The balance on the financial account consists of: a. the inverse of the balance on the current account. b. the difference between external wealth and internal wealth. c. the change in external liabilities minus the change in external assets. d. the change in external wealth plus the change in internal wealth.
Consider the following economy C=1000+0.4(Y-T) 1%3500 T=400 G=300 What is the consumption of equilibrium?
Suppose that a vaccine manufacturing company owned entirely by U.S. citizens opens a new facility in Canada. Answer all three parts below. In each case, carefully explain your answer. a) What sort of foreign investment would this represent? b) What would be the effect of this investment on current Canadian Gross Domestic Product (GDP) and U.S. GDP? c) What would be the effect of this investment on future per capita incomes in Canada?
Consider the following model of an economy with no international trade, and in which the price level is fixed: C = 40 + (8/9)∙DI I = 30 G = 30 Taxes = (1/8)∙GDP where C is consumption demand, DI is disposable income, I is planned investment, G is government purchases, and all whole numbers are in billions of dollars. Determine the equilibrium level of production (GDP) in this economy (show your work), and draw this equilibrium situation on a graph. Use the multiplier to determine the change in equilibrium GDP that would result from an exogenous 16 billion dollar increase of government purchases. Then determine…
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Which of the following are myths about the U.S. economy? Check all that apply. A. The United States is a relatively closed economy. B. Chinese imports account for less than 20% of all imports into the United States. C. Federal government jobs have grown rapidly over the past few decades. D. Business profits account for roughly one-third of the price Americans pay for typical goods and services.
None
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Consider the economy of the planet Navarro. In Navarro, domestic investment of 400 million imperial credits earned 15 million in capital gains during the year. In addition, Navarro purchased $160 million in new foreign assets and foreigners purchased $10 million in Navarro assets. Assume that the valuation effects total $5 million in capital gains. a. Compute the change in domestic wealth in Navarro. b. Compute the change in external wealth for Navarro. c. Compute the total change in wealth for Navarro. d. Compute domestic savings for Navarro. e. Compute Navarro’s current account. Is the CA in deficit or surplus? f. Explain the intuition for the CA deficit/surplus in terms of savings in Navarro, financial flows, and its domestic/external wealth position. g. How would an appreciation in Navarro’s currency (the imperial credits) affect its domestic, external, and total wealth? Assume that foreign assets owned by Navarroans are denominated in foreign currency.
The blue (inner) curve on the following graph shows the current production possibilities frontier (PPF) for the economy of Wilshire, and the green (outer) curve shows the PPF for Wilshire next year if the economy were to operate at point B today. That is, investment choices today impact the growth of the economy, and thus the PPF for next year. Suppose that this year, the economy is operating at point B, but then an earthquake destroys more capital than is being produced during the year. On the following graph, the PPF that best describes the Wilshire economy next year is ________ (options: PPF1, PPF2, PPF3). PPF1 is orange line PPF2 is purple line PPF3 is tan line.

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