Question
Macroeconomics / about GDP Excerpt 1: Growth rates, for example, highlight the dynamic sectors of the economy. But often the fastest growing components of GDP
Macroeconomics / about GDP
Excerpt 1:
Growth rates, for example, highlight the dynamic sectors of the economy. But often the fastest growing components of GDP are the smaller ones. These components will contribute proportionately less to the overall increase in GDP because their growth rates apply to small initial values.Thomas Boustead (1998)
a) Does the excerpt above describe a situation in which the mathematical relationship between GDP and its components is a multiplication or an addition?
Excerpt 2:Although the 8.0-percent growth rate of exports is projected to exceed that of imports (6.9 percent)....net exports will not significantly augment...Thomas Boustead (1998)
b) Is it possible that despite a greater growth rate in exports, relative to imports, the net export balance falls?
c) Why could the range in the growth rate in a country net export balance (NX) greatly exceed the range in the growth rate in that country's personal consumption expenditure?
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