How much must consumption decline for this to occur

Assignment Help Business Management
Reference no: EM132194750

If every additional 3 percentage points in the investment rate boost GDP growth by 1% point and investment is financed with consumer saving. The economy is now characterized by

Consumption: $10 trillion

Savings (= :$2 trillion

Investment):

___________________________

GDP:$12 trillion

If the goal is to increase the growth rate by 2 percentage points,

(a) By how much must investment increase?

(b) By how much must consumption decline for this to occur?

Reference no: EM132194750

Questions Cloud

Why are good and services counted in gdp : Why are good and services counted in GDP at market value? Are there any dis-advantages or problems in using market value?
How could adjustment of wages : How could adjustment of wages that takes the economy back to a new long run equilibrium.
How long would it take for china gdp to double : With its population increasing at 0.6 percent per year, how long will it take for per capita GDP to double?
Real interest rate makes : An increase in how responsive investment is to the real cost of borrowing or how net exports respond to the real interest rate makes the IS curve less steep.
How much must consumption decline for this to occur : If the goal is to increase the growth rate by 2 percentage points, (a) By how much must investment increase?
Developing a learning plan for an exceptional learner : Discuss the advantages and disadvantages of developing a learning plan for an exceptional learner.
Dow jones index : Discuss, recognising that in June 2011, the Dow Jones Index was below its peak in 2000.
Perfectly elastic or inelastic demand-supply : If the market is perfectly competitive and neither consumers nor producers have perfectly elastic or inelastic demand/supply, which of the following are always
Assume the bank does not hold excess reserves : Include the $50 as part of the new money supply and assume the bank does not hold excess reserves.

Reviews

Write a Review

Business Management Questions & Answers

  After reviewing the web site workplace bullying

In this weeks lecture you read about workplace bullying which does cause conflict and is extremely unhealthy, illegal and disruptive. After reviewing the web site Workplace Bullying Does you organization have a policy on bullying?

  Research the key facts and critical issues of bp

Research the key facts and critical issues of BP before the BP oil spill of 2010 and summarize them here as they relate to the past conduct of the organization.

  What role has religion played in culture and religion

What role has religion played in culture - and what role has culture played in developing religion and marketing and advertising practices must take these into account.

  Does this sense about strategy for powerless organizations

Hugh Russel seemed to increase its legitimacy and power by developing personal relationships with other industries. Does this make sense to you as general strategy for powerless organizations?

  Financial accounting services market in australia

Consider the financial accounting services market in Australia. Select one of the e-commerce models from below:

  Because the likelihood that the zoning referendum will be ap

Because the likelihood that the zoning referendum will be approved is such an important factor in the decision process, Glenn suggested that the firm hire a market research service to conduct a survey of voters. The survey would provide a better esti..

  Operations management question

Even though this technique claims to be flawless (DMAIC and/or DMADV ), what are some drawbacks to data collection and analysis? How can a company certify the information's accuracy?

  Finding qualified candidatesyou work for a small business

finding qualified candidatesyou work for a small business that is having trouble finding qualified candidates for a

  Excluding any potential no-show billings

Excluding any potential no-show billings, how much extra room revenue will be gained from overbooking if Tonya indeed experiences ten no-shows.

  Examine the organizational structure that has resulted

Examine organizational structure that has resulted from merger or acquisition. Analyze differences between the resulting company and original two organizations.

  Value creation and the associated capturing of value

What kinds of things could this firm do to improve their performance in interacting with their customers and potential customers using internet and social media technologies? Try to also leverage your learning from previous modules where we have d..

  Definition of the emerging concept of the tlm field

Discuss some emerging concepts within the industry, over the last two years and the definition of the emerging concept of the TLM field.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd