NEED PART B Use the following data for questions 9-10. For each give the algebra

Question

NEED PART B

Use the following data for questions 9-10. For each give the algebraic equation that you employ: SHOW YOUR WORK 2. Economists have calculated the following values for some country A Economic Variables Billions of Dollars 3000 1200 Consumption expenditures Transfer payments Total tax revenue (including SS and med. tax1400 rev Nonresidential Investment Residential Investment Inventory Investment 160 140 100 services 600 320 700 Government Spending on g oods and Imports 8) A) Calculate the value of private saving? Show formula you use B) Calculate the value of total demand for final goods (equal total income) measured by GDP in Country A? Show formula you use

Explanation / Answer

Answer : 8) B) Here "value of total demand for final goods" means the total spending amount on expenditures. In GDP the total spending amount on expenditures is measured by the following method or formula,

GDP in experienditure method = C + I + G + (X - M)

Here, C = Expenditure on consumption = $3000 billion

I = Investment which include nonresidential investment, residential investment and inventory investment = 160 + 140 + 100 = $400 billion

G = Government expenditures = $600 billion

X - M = Export - Import = 700 - 320 = $380 billion

Now, GDP in experienditure method = $3000 billion + $400 billion + $600 billion + $380 billion = $4380 billion.

Therefore, final goods' total demand value is $4380 billion in country A.

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