Question
Problem 5 (need this question in order to answer question 6) The components of a nation's gross domestic product were identified and discussed in this
Problem 5 (need this question in order to answer question 6)
The components of a nation's gross domestic product were identified and discussed in this chapter. Assume the following accounts and amounts were reported by a nation last year. Government expenditures (purchases of goods and services) were $5.5 billion, personal consumption expenditures were $40.5 billion, gross private domestic investment amounted to $20 billion, capital consumption allowances were $4 billion, personal savings were estimated at $2 billion, imports of goods and services amounted to $6.5 billion,and the exports of goods and services were $5 billion.
Problem 6 ( I need this question answered please)
Assume that some of the data provided in problem 5 change next year. Specifically, government expenditures increase by 10 percent, gross private domestic investment declines by 10 percent, and imports of goods and services drop to $6 billion. Assume the other information as given remains the same.
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?
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