Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 23, Problem 4.1P
To determine
Change in inventories, real
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A number of economists contend that official measures of Canadian gross private investment expenditures are understated.
For instance, household spending on education, such as college tuition expenditures, is counted as consumption. Some economists suggest that these expenditures, which amount to 6 percent of GDP, should be counted as investment instead.
investment if this suggestion was adopted?
Based on this 6 percent estimate and the estimated 2020 Q2 GDP being $1,820,369 million, how many millions of dollars would shift from consumption.
Smillion would shift from consumption to investment if this suggestion was adopted. (Enter your response rounded to the nearest whole number.)
India is the second populous country in the world that has indicate growth improvement over time. Suppose consumption function for India is C = 250 + 0.6(Y – T) and taxes are autonomous which equal to $20.
(a)Find India’s consumption function (C).
(b)Suppose India’s investment (I) is equal to $300 and government spending (G) is equal to $150 at every level of disposable income. Calculate national income equilibrium for a 3-sectors economy.
(c) In the same year, India seems to be very active in export and import activities. This sector has contributed $100 for net export (NX). Calculate national income equilibrium for the 4-sectors economy of India.
(a) Assume that Gross Domestic Product (GDP)/Total output (Y) is 6,000. Consumption (C) is given by the equation C = 600 + 0.6(Y – T) where T is the tax. Investment (I) is given by the equation I = 2,000 – 100r, where r is the real rate of interest, in percent. Taxes (T) are 500, and government spending (G) is also 500. What are the equilibrium values of C, I, and r?
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Principles of Economics (12th Edition)
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