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Question 2: 2.1 Below is a list of domestic output and national income figures for a given year. Calculate the national incom
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Answer #1

Expenditure method is the method which measures the final expenditure on on gross domestic product at market price during and accounting year.

GDP = C+I+G+(X-M)

= 245+ 72+56+13

= 386

2. The demand for money has two components

A. Transactional demand- It is the money used for purchasing. This type of demand help meet day to day transactions.  

B. Asset demand- In this type the money is stored for later use as a store of value.

Transaction demand Interest rate. Demand for money

Asset Demand Interest t - - - -- rate. Io - - - - - - with demand Demand for money. increase in interest rate the for money d

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