Two-Sector Economy A simplified economy consists of the two sectors Transportation and Energy. For each $1 worth of output, the transportation sector requires $.25 worth of input from the transportation sector and $.20 of input from the energy sector. For each $1 worth of output, the energy sector requires $.30 from the transportation sector and $.15 from the energy sector.
(a) Give the input–output matrix A for this economy.
(b) Determine the matrix (I − A)−1. (Round entries to two decimal places.)
(c) At what level of output should each sector produce to meet a demand for $5 billion worth of transportation and $3 billion worth of energy?
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