This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Principles of Economics W1105x-1 Fall 2009 Sunil Gulati Solution Set #3 1. a. Ace Computers sales contribute to consumption ( C , sales to households), planned investment ( I , sales to private firms), government purchases ( G ), and net exports ( NX ). In addition, unplanned investment ( I ) occurs when there are changes in inventories. Scenario I Scenario II Scenario III C $200 million $250 million $300 million I $ 50 million $ 50 million $ 50 million G $100 million $100 million $100 million NX $100 million $100 million $100 million Total expenditures $450 million $500 million $550 million Change in inventories +$50 million $0 million $50 million Contribution to GDP $500 million $500 million $500 million Total expenditures on Aces computers are $450 million, $500 million and $550 million in Scenarios I, II and III, respectively. The contribution of Ace Computers to GDP in 2006 is equal to $500 million in each scenario....
View Full Document
This note was uploaded on 02/27/2011 for the course ECONOMICS 101 taught by Professor G during the Spring '11 term at Columbia College.
- Spring '11