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49003 Economic Evaluation

tag 0 Download 3 Pages / 566 Words tag 30-09-2020

Question:

Which proposal will you recommend on the basis of GDP deflators?

Why? Because Based on the GDP deflators on respective years an even smaller real GDP is obtained.

Will your recommendation change if 2023 is used as the base year for determining Real GDPs instead of 2018 (as is presently the case)?

Why? Because Real GDP in 2023 remain still lower than scenario without investment

How much investment (expressed in 2018 dollars) will be needed in (currently investment is $30bn, expressed in 2013 prices) in order to make Proposal A better than Proposal B?

What value of ‘Marginal Propensity to Consume’ is implicit in your calculations for proposal B?

Please present your calculations here (just two steps of calculations)?

Is the proposal, in this assignment, to invest in infrastructure based on Keynesian or Neo-classical reasoning?

Why? Because no evidences given on equal or unequal intervention of government.

Will you recommendation change if, say, due to unforeseen Global Financial Crises, the economy experiences severe deflation and - as a result – the GDP Deflator for 2023 gets reduced to 10?

Why? Because Investment through both the proposal fail to increases real GDP?

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