(a) Differentiate between the open input output model and the closed

input output model. [2 Marks] (b) Briefly explain the assumptions of

the input output model

[4

Marks]

(c) Consider a hypothetical economy consisting of three sectors A, B and C with inputs and outputs for

a particular period. The balanced transaction table has the form shown in the following table. The figures given are in billions of shillings.

INPUT TO

External Demand

Total Output

A

B

C

18

30

45

15

108

Output

from A

27

30

60

3

120

Output

4884 15

54

40

60

26

180

from B

9

20

Output

from C

Other

input

108

120

180

Total input

Required:-

[3

. Determine the technical coefficient matrix

Marks]

ii. If the external demand was to change from 15, 3 and 26 billion shillings to 10, 2 and 20 billion, calculate the total output for sector A, B and C.