Re: JNU MACRO, PLEASE HELP !

Posted by Dr. Strange on Apr 16, 2016; 5:36pm
URL: http://discussion-forum.276.s1.nabble.com/JNU-MACRO-PLEASE-HELP-tp7599891p7599892.html

Y= Worker's income(W) + Profits(P)

G= P/4

Public investment = P/8

Private Investment = 0.5 * 3P/4 =3P/8
Total investment = P/2
Given K/Y =4
dK = 4 dY
dK= P/2
P/2 = 4 dY
P/2Y = 4 dY/Y
Given dY/Y=6
So P/2Y=24
P/Y =48 ....Ans

Now new case,
G= P/2

Public investment = P/4

Private Investment = 0.5 * P/2 =P/4
Total investment = P/2
Total investment is same as earlier case so growth rate is same and social spending is higher

Please confirm the answer