1 True
2 False - Must be accrual basis
3 True
4 True
5 True
The answer is B if that is the correct one
Answer:
Gross private domestic investment less depreciation is net private domestic investment.
Explanation:
Investment is addition to capital stock during a period of time. Depreciation is fall in value of fixed (capital) assets due to usage, wear & tear, obsolescence.
Gross Private Domestic Investment = Total addition to capital stock by private domestic sector, without accounting for depreciation of existing capital stock.
Net Private Domestic Investment = Addition to capital stock by private domestic sector, accounting for depreciation deduction of existing capital stock.
So, Gross Private Domestic Investment - Depreciation = Net Private Domestic Investment.
Answer:
a. real interest rate is 0.217 or 21.7%.
b. saving = 134
, investment is 332
, consumption is 3666.
Explanation:
a) Y = Cd + Id + Gd
Where Y= output
Cd= consumption
Id= Investment purchases
Gd=Government purchases
Y= (3600 - 2000r + 0.10Y) + (1200 - 4000r) + 1000
Y=5800-6000r+0.10Y
0.9Y=5800-6000r
At full employment Y=5000
Putting the value of Y in the above equation
0.9*5000=5800-6000r
5800-4500=6000r
r=0.217
Therefore real interest rate is 0.217 or 21.7%.
(b) Sd = Y - Cd - G
where Sd is national saving
Sd = Y - (3600 - 2000r + 0.1Y) - 1200
Sd = 5000-(3600 - 2000*0.217 + 0.1*5000) - 1200 =5000-3600+434-500-1200 = 134
Therefore, saving = 134
Id= 1200-4000*0.217 =332
Therefore, investment is 332
Cd= 3600-2000r+0.10Y=3600-434+500=3666
Therefore, consumption is 3666.
Answer: Private goods.
Explanation:
Private goods are commodities bought by a consumer for personal consumption. It is very easy to determine the cost of private goods as the cost is the price at which it is sold in the market. On the other hand public goods are commodities that everyone enjoys in society that are not necessarily paid for by consumers. Therefore to determine the final cost of public goods is difficult to ascertain.
