Table 2 shows the elements of national income accounts of a country. The economy is inequilibrium.AccountsConsumption (total)InvestmentGovernment ExpendituresImportsExports£bn801281016A) What is the current equilibrium value of national income?B) What are the levels of injections and withdrawls?C) Assume that the national income rises to £108 bn and the consumption of thedomestically produced goods rises to £72 bn. What is the marginal propensity toconsume (use 2 decimal places)?D) What is the multiplier for this economy?E) Comment on the results in part c) ad d).

To determine the current equilibrium value of national income and calculate the levels of injections…

Answered: Table 2 shows the elements of national…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Consider the information about the economy of Pakistan. Note that the currency of Pakistan is the rupee. The government purchases: 3.00 trillions of rupees. Individuals consume: 11.30 trillions of rupees. Individuals save: 5.14 trillions of rupees. Businesses invest: 1.30 trillions of rupees. Foreigners spend: 0.69 trillions of rupees to purchase Pakistani firms. Pakistan imports: 1.92 trillions of rupees. Pakistan exports: 1.31 trillions of rupees. Calculate Pakistan's GDP. Assume that the values are all current and no conversions need to be made. Give your answer in terms of trillions of rupees, and round to two decimals.

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