Question 1: Suppose the government cuts its buys by $120 billion. As a result, the budget deficit is diminishes by $40 billion, private domestic saving reduces by $10 billion, disposable personal income reduces by $80 billion and the trade deficit is diminishes by $15 billion. By how much has national income (Y) changed?
Question 2: Use the subsequent information to answer the questions which are given below:
Data are in Trillions of Dollars
• Personal consumption expenditures $3.0
• Net private domestic investment $1.4
• Depreciation $0.2
• Government purchases of goods and services $2.0
• Exports $0.5
• Imports $0.3
• Foreign factor income $0.1
i) Evaluate the GDP
ii) Evaluate the net exports