Jnu questions

[swopnesh]

If the excess of private sector savings over investment in ayear in an economy increases by rs 700 crores , the net savings of the government sector in ayear decreases by  850 crore and the annual value of import of goods and services increase by 600 crores what is the change in the annual value of exports of goods and services in the economy .
         A). Increase by rs 450 crores,
          B) increases  by 750 crores
          C) decreases by 450 crores
           D) decreases by rs 750 crores.  
I got  option c is it  the correct one.plz help me

[kavya]

YOU ARE SUPPOSED TO USE THE FOLLOWING IDENTITY

S-I= (G-T)+ (X-M)
S stands for savings. I for investment, G for gvt. expenditure, T stands for tax revenue, X for exports and M for imports.

[Sumit]

Ans:A). Increase by rs 450 crores

Check attached image for explanation.

[Ankit Agrawal]

Hi,

Thanks sumit for putting up the snap shot of your solution. I also got the same answer.

Can you explain this answer to me on a conceptual level?

[Sumit]

I think after having this solution everything should be clear....we simply get this answer bcoz private saving increasing, govt saving decreasing and import increasing....we would hv different answer (except  a constant change in all) if the value of any or all differ from this given values....plz mention which part of the solution u didn't get...