Calculate Ecoland’s real GDP in 2018, i.e., GDP measured in 2014 $. (b)   How much do households save in Ecoland? Is it enough to finance domestic investment? (c)   Does the government have a balanced budget?  If not, what is the surplus or deficit

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter8: Economic Fluctuations, Unemployment, And Inflation
Section: Chapter Questions
Problem 14CQ
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The following transactions took place in Ecoland in 2018:

 

Trillions of 2014 dollars

Government purchases

400

Taxes

360

Firms’ profits

300

Investment

400

Consumption expenditure

1000

Wages paid to labor

1400

Exports

300

Government transfer payments

150

Imports

350

(a). Calculate Ecoland’s real GDP in 2018, i.e., GDP measured in 2014 $.

(b)   How much do households save in Ecoland? Is it enough to finance domestic investment?

(c)   Does the government have a balanced budget?  If not, what is the surplus or deficit?

(d)  If Ecoland’s nominal GDP in 2018 is $1900 trillion, how much inflation has Ecoland experienced since 2014?

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