Status of the economy and gdp , Business Economics

• Although the country produced several types of commodities (goods and services) in the year 2002, but this country's Central Statistics Office has grouped such commodities into five broad categories (A to E) for the purpose of estimating private consumption expenditure for the year 2002.

1.While it is difficult to precisely predict future economic growth, the country's leading economists believe that if no measures are taken to revitalize the economy in 2012, the economy will become stagnant and its effect would be reflected in the GDP for the year 2017. In order to estimate the GDP for 2017,

i = interest; w = wages/salaries; r = rent; p = profit;
m = intermediate inputs; s = market value of output sold for intermediate uses;
f = market value of output sold to final users.

Note: All values are in billions of dollars, expressed in 2017 prices.
Other select information for the year 2017 (in 2017 prices) is noted below: Gross National Expenditure (GNE) $ 1500bn Depreciation $ 100bn Direct taxes $ 100bn Indirect taxes $ 80bn Net exports (deficit) $ (100)bn Transfer payments $ 200bn

• If however measures are taken to revitalize the economy (in this instance - by investing in Proposal A or Proposal B) in 2012, the GDP for the year 2017 could be affected - due to the multiplicative effect of investments. For Proposal A, for example, GDP will be roughly equal to the ‘without investment GDP' for 2017 plus investment inclusive of the multiplicative effect. The average value of the investment multiplier for investment in Project A can be determined from the following information:

The GDP of the country, inclusive of the multiplicative effect of investment, for Proposal B, for the year 2017, can be estimated from the following simplified representation of the country's economy: The total value of the output produced by all firms in the country is estimated to be $1844bn. Of this output, $100bn worth of output is expected to be kept aside by the firms to build inventories for the future. In that year, the production processes are estimated to consume $400bn worth of intermediate inputs (raw materials), and the corporate sector is estimated to suffer a loss of $200bn. The indirect taxes in that year are estimated to be $100bn, and wages and salaries, $500bn. All these estimates are in 2017 prices.

• Assume that the investments in either of the proposals will not cause any inflationary pressures.

Posted Date: 2/19/2013 12:25:24 AM | Location : United States

Related Discussions:- Status of the economy and gdp , Assignment Help, Ask Question on Status of the economy and gdp , Get Answer, Expert's Help, Status of the economy and gdp Discussions

Write discussion on Status of the economy and gdp
Your posts are moderated
Related Questions
Does the structure of the population issue? Dependents into an economy, children as well as old people are assists by the economically active. Dependency ratio uses to measure

Define institutions in the context of business strategy, and explain the role of institutions when considering entering a foreign market. Explain the role of culture in how these i

B. Complete the following table

What is the t-value associated with 25 degrees of freedom and 20% in the tail? (Please round your answer to 3 decimal places)

Why are economies developed of less developed countries by growing its secondary sector? Economies cannot grow of less developed countries by developing its secondary sector si

Explain how the economic theories applied in business economics

the central problem facing a group of survivors on a ship