Consider an Economy with GDP of $100 Billion,desired Investment of $20

question 79

Essay

Consider an economy with GDP of $100 billion,desired investment of $20 billion,desired consumption of $50 billion,and government purchases of $2 billion.Calculate the following:
a.Desired absorption
b.Desired national saving
c.Desired foreign lending

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Definitions:

Annual Depreciation

The portion of the total cost of a tangible asset that is expensed each year over its useful life.

Book Value

A rephrased definition: The net value of an asset or liability recorded on the financial statements, factoring in depreciation, amortization, and impairment, but not necessarily indicative of market value.

Activity-Based Method

An accounting method that assigns costs to products or services based on the activities and resources that go into producing them, to more accurately reflect the costs associated with each product or service.

Usage Hours

A measure of the time that an asset is actively used in production or operations.