Tut GDP ques and assignment.docx - Principles of Economics...

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Principles of Economics / Introduction to Economics Supplementary question for Tutorial ( Week 10 UM Schedule – GDP ) Calculate GDP GNP and NNP for Country Y Billions $ Private Consumption 12 550.00 GPInv 3000.00 Govt C and I 2000.00 Exports 5550.00 Imports 4500.00 GDP Receipts Factor Inc from Abroad 600.00 Payments Factor Inc to ROW 700.00 Depreciation 2500.00 C (Consumption)= 600 + 0.7 Y(is income) I (Investment) = 300 And assuming the government is absent Then solve Y = C + I Y = 600 + 0.7 Y + 300
Y – 0.7 Y = 900n Y = (900/0.3) = 3000 So Y = 3000 Also if C = 600 + 0.7 Y The marginal propersinty to consume is 0.7(every dollar you spend). Every 1 unit of income rise causes consumption rise of 0.70 and savings 0.30

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