What impact an increase of 3 in final demand for

Question

Assume an economy with 3 sectors: Agriculture, Manufacturing, and Services. To produce $1 of agricultural output requires $0.10 worth of agricultural products, $0.30 worth of manufacturing products, and $0.20 of services. To produce $1 of manufacturing output requires $0.35 of manufacturing, $0.05 of agricultural, and $0.30 of services worth of input. To produce $1 of ser- vices requires $0.15 worth of services and $0.25 of manufacturing products. The annual final demands for outputs of the sectors are $176, $320 and $650 billion, respectively.

(a) Determine the value of sectoral and national outputs.

(b) What impact an increase of 3 % in final demand for manufacturing products has on the sectoral and national outputs.

(c) What impact an increase of 3 % in final demands for all sectors has on the sectoral and national outputs.

Answer 1

Solve the following Economics problem by applying the appropriate theory and concepts and please show the procedure to solve it. Question: Suppose an economy having 3 sectors: Agriculture, Manufacturing and Services. To generate $1 of agricultural output needs $0.10 worth of agricultural products, $0.30 worth of manufacturing products and $0.20 of services. To generate $1 of manufacturing output needs $0.35 of manufacturing, $0.05 of agricultural and $0.30 of services worth of input. To generate $1 of services needs $0.15 worth of services and $0.25 of manufacturing products. The yearly final demands for outputs of the sectors are respectively $176, $320 and $650 billion. 1) Find out the value of sectoral and national outputs. 2) Determine the impact an increase of 3 % in the final demand for manufacturing products has on the sectoral and national outputs. 3) Determine the impact an increase of 3 % in the final demands for every sectors has on the sectoral and national outputs.