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    Measures of Output, Prices, and Employment

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    1. Suppose, in a two-sector model, that individuals receive the following payments from the business sector: wages $520, interest $30 rent $ 10 and profits $80. Consumption spending is $550 and investment is $90.
    a. Find the market value of output and household saving
    b. What is the relationship of saving and investment?

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    Solution Preview

    a) the market value of final output is $640, found by adding wages of $520 + interest of $30 + rent of ...

    Solution Summary

    The expert determines the relationship between saving and investment.