Question

Suppose, in a two sector model comprising consumers and firms, that the individuals receive the following payments for their provision of goods and services: wages K60000, interest K30000, rent K10000 and profits k8000. Consumption spending is K101000, planned investment expenditure is K20000 and actual investment expenditure is K7000.
a) What is the equilibrium output

Answer 1

equilibrium output = wages + interest + rent + profits = K60000 + K30000 + K10000 + k8000 = К108000