We have an economy with two major sectors: Sector I produces the means of production, and Sector II produces the means of consumption. The constant capital advanced in Sectors I and II are $20 billion and $30 billion, respectively. Assume that the variable capital advanced in Sectors I and II are $20 billion and $10 billion, respectively. Also assume that the rate of surplus value is 100% in each sector. Is the economy balanced or will a macroeconomic crisis occur due to the un-coordination between the two sectors? Explain with reference to the numerical values in this example.
We have an economy with two major sectors: Sector I produces the means of production, and Sector II produces the means of consumption. The constant capital advanced in Sectors I and II are $20 billion and $30 billion, respectively. Assume that the variable capital advanced in Sectors I and II are $20 billion and $10 billion, respectively. Also assume that the rate of surplus value is 100% in each sector. Is the economy balanced or will a macroeconomic crisis occur due to the un-coordination between the two sectors? Explain with reference to the numerical values in this example.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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We have an economy with two major sectors: Sector I produces the means of production, and Sector II produces the means of consumption. The constant capital advanced in Sectors I and II are $20 billion and $30 billion, respectively. Assume that the variable capital advanced in Sectors I and II are $20 billion and $10 billion, respectively. Also assume that the rate of surplus value is 100% in each sector. Is the economy balanced or will a
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