(This exercise builds on Exercises 49, 101, and 102.) a. Consider the industries J\,...
Chapter 2, Problem 103(choose chapter or problem)
(This exercise builds on Exercises 49, 101, and 102.) a. Consider the industries J\,..., Jn in an economy. We say that industry Jj is productive if the yth column sum of the technology matrix A is less than 1. What does this mean in terms of economics? b. We say that an economy is productive if all of its industries are productive. Exercise 102 shows that if A is the technology matrix of a productive economy, then the matrix / - A is invertible. What does this result tell you about the ability of a productive economy to satisfy consumer demand? c. Interpret the formula(/ - A)-1 = / + A + A2 + + Am + derived in Exercise 102d in terms of economics.
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