Question

SECTION ONE: 1.5 points. Here are a few things to test your understanding of the topic. a) Assume (x-m) is -3% of GDP, consumption is 68% of GDP and Investment is 16% of GDP. What is the percent of GDP from Government? b) GDP=C+18+G+(x-m....note.ig-gross Investment. Write the formula for NDP in this same format and explain. c) Use the table below to answer the questions in par 'c'. 3,500 3,500 4,000 3,900 4,500 4,300 If business invests $100, by how much will GDP (Y) rise? Please provide answer and explain answer.

Answer 1

Answer:

1.(​a) GDP =C+ I+ G+( X-M)

100%=68%+16%+ G-3%

G=19% of GDP

(b) N DP= c+ I + G+(X-M)- depreciation

some equipments or Machinery are depreciated or used up in the process of production which has to be

deducted from GDP to get Net domestic product.

(C) change in G DP= (1/(1-MPC))* change in investment

Mpc= change in c/ change in y

=400/500=0.8

change in GDP=( 1/1-0.8)*100=500 Each dollar invested will increase the GDP due to the effect of multiplier.

Answering first full question is as per HOMEWORKLIB RULES.