Chapter 4.7, Problem 27E

The technology matrix for an economy based on agriculture $\left(A\right)$ and manufacturing $\left(M\right)$ is

$\begin{array}{l}\begin{array}{ccc}& A& M\end{array}\\ M=\begin{array}{c}A\\ M\end{array}\left[\begin{array}{cc}0.3& 0.25\\ 0.1& 0.25\end{array}\right]\end{array}$

(A) Find the output for each sector that is needed to satisfy a final demand of $\$40$ million for agriculture and $\$40$ million for manufacturing.

(B) Discuss the effect on the final demand if the agriculture output in part (A) is increased by $\$20$ million and manufacturing output remains unchanged.