Suppose firm A sold raw material to firm B for rupees 1000 and the firm C for rupees 600 . firm B sold its product partly to private consumers for rupees 800 and the remaining product was exported for rupees 600. firm C part Of its product to the government for rupees 500 for public consumption and the remaining product worth rupees 500 was unsold stock left with it (assume that firm A buys no raw material) then find Savings and investment?

Padma,

Saving = Total Value Added - Consumption
=  2400 - 1300
Saving = Rs 1100.

Total Value Added = Value added by Firm A + Value added by Firm B + Value added by Firm C. 
= 1600 + 400 + 400
= Rs 2400

Consumption = Sale to Private Consumers + Sale to Government
= 800 + 500
Consumption = Rs 1300

Investment = Unsold Stock + exports
= 500 + 600
Investment = Rs 1100

 

  • 3
What are you looking for?