CategoryExpenditure (in billions of 2020 Q2 NZ Dollars)Household final consumption40.3Government final consumption15.7Budget balance-3.8Total investment14.4Change in inventories-3.6Exports of goods and services18.6Imports of goods and services16.5Calculate Africa's planned investment in the second quarter of 2020.

Total investment has two components: Depreciation, that is the expenditure on capital replacement,…

Answered: Category Expenditure (in billions of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Category	Expenditure (in billions of 2020 Q2 NZ Dollars)
Household final consumption	40.3
Government final consumption	15.7
Budget balance	-3.8
Total investment	14.4
Change in inventories	-3.6
Exports of goods and services	18.6
Imports of goods and services	16.5

Calculate Africa's planned investment in the second quarter of 2020.

Expert Solution

Step 1

Total investment has two components:

Depreciation, that is the expenditure on capital replacement, this is also called planned investment
Net investment, which is the part of total investment spent on addition of new stock of capital, this is unplanned investment as it is taken according to the requirement of the markets and economy

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