UTS ECONOMICS1: Economic Evaluation Assignment, Autumn 2019

This economics assignment analyzes the economic performance of Country X, evaluating different investment proposals (A and B) based on GDP, inflation, and the marginal propensity to save. The assignment explores whether to invest in infrastructure based on Keynesian or Neo-classical reasoning. The solution includes calculations and addresses how unforeseen events like global financial crises and changes in consumption patterns would affect the recommendations. The document examines the impact of investment on economic indicators and concludes with a discussion of opportunity costs in economic evaluation. The assignment uses data from 2008, 2013, 2018, and 2023, considering GDP deflators, nominal GDP, and real GDP under different investment scenarios. The solution also provides insights into the relationship between investment, consumption, and economic growth.

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ECONOMIC EVALUATION
INTRODUCTION
Economic evaluation is the procedure of orderly recognizable proof, estimation and valuation of
the data sources and results of two elective exercises, and the ensuing relative investigation of
these. The motivation behind financial assessment is to recognize the best strategy, in light of the
proof accessible. It shows how the hypotheses identify with the inquiry and clarify the
speculations. Essentially investigating is drawing out the hypothesis and after that assessment is
making your inferences and furthermore testing the examination. (Dasgupta, 1972)
Discussion
Below is the economic performance with the status of the economy of the country X which is
inhibited by intelligent hardworking people who operate in parliamentary form of democracy
1. Give a rundown of the financial execution of the nation –tabled below
2008 2$013 2018 2023
WITHOUT INVESTMENT: GDP Deflator $20bn $60bn $150bn $1100bn

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Nominal GDP $150 bn $100bn $230bn $1150
Real GDP (2018 prices) $140bn
WITH INVESTMENT A: Real GDP (2018 prices) $1600bn
B: Real GDP (2018 prices) $2630bn
2. Which proposition will you prescribe?
A B Besides Not either
Reason _____That discloses to you what a nation is great at delivering. Gross domestic product
is the nation's all out monetary yield for every year. It's identical to what is being spent in that
economy (no more than 10 words)
3. Is the proposition, in this task, to put resources into framework dependent on Keynesian
or Neo-established reasoning?
Keynesian Neo-established Both

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Why? Because Keynesian financial aspects are a gathering of different macroeconomic
speculations about how in the short run.
4. What estimation of 'Peripheral Propensity to Save' is certain in your counts for second
proposal? The minimal affinity to save is the piece of a development in compensation that isn't
spent on an expansion in making it practical and effective. That is, the negligible affinity to save
is the extent of the value of family earnings that is made effectively used. It is the slope of the
line plotting saving against pay.
5. Will your recommendation change if, say, due to unforeseen Global Financial Crises, the
economy experiences very high inflation and - as a result – the GDP Deflator for 2023 becomes
300?
Yes No
Why? Because __They are sudden and capricious and commonly drastically sway supply or
demand all through the business sectors
6. Will your view change if, for Proposal A, people increased their annual consumption by
exactly the same amount as increase in their annual incomes (as shown in Table 1 of the
assignment)?

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Yes No
Why? Because _Consumption is particular from utilization use, which is the buy of products and
ventures for use by families. A buyer's purchasing task is influenced essentially by the dimension
of procurement association.
7. For what benefit of investing (currently investment is $40bn, expressed in 2013 prices)
will you become indifferent between recommending Proposal A or Proposal B?
I will be indifferent to recommend proposal A reason being the investment is not included and
hence GDP
Conclusion
On conclusion, evaluation economics furnish leaders with data about the open door cost of the
choices that could be made, where opportunity cost is the advantage we would have gotten had
the assets used to give one treatment been utilized to give another rather, or all the more carefully

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the advantage we would have acquired had we utilized the resources for their next best
alternative use.
REFERENCE
Dasgupta, P., Sen, A. and Marglin, S., 1972. Guidelines for Project Evaluation.