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Problem

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question

Suppose the production process is lengthy and 75% of the capital input at present is dependent on the output in the next period, and 25% is dependent on the output in the period thereafter. The technical capital / output ratio is 3. Furthermore, business reacts cautiously to capital shortages; it will only provide capital for 80% of the present gap and 10% of the preceding gap. Can you describe thisdistributed lag accelerator process?

category

economics

options

  1. Investments are proportionate to the variance between actual and expected GNP for the next period only.
  2. Investments are based on a 50% consideration of the present GNP and 50% on the GNP two periods ahead.
  3. Investments are solely based on present GNP.
  4. Investments are solely based on future GNP.
  5. Investments are predicted by a model that factors in only the GNP growth rate of the previous two periods.
  6. Investments are based on a fixed percentage of present GNP, without consideration for past or future output.
  7. Investments are adjusted based on a moving average of GNP over the past three periods, without forecasting future output.
  8. Investments are based on expectation of GNP in the future, present GNP, and past GNP.
  9. Investments are determined by a complex formula that incorporates present GNP, inflation rates, and interest rates, but not past or future GNP.
  10. Investments are solely based on past GNP.

src

stemez-Economics

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