Assume some of the data provided in Problem 1 [note: the correct reference should be to Problem 5] changes next year. Specifically, government purchases of goods and services increase by 10 percent; gross private domestic investment declines by 10 percent; and the imports of goods and services drop to $6 billion. Assume the other information as given remains the same next year.
a. Determine the nation’s gross domestic product for next year.
b. How would your answer change in (a) if personal consumption expenditures are only $35 billion next year and capital consumption allowances actually increase by 10 percent?