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Using the following information I am to calculate government purchases net taxes

Using the following information, I am to calculate: government purchases, net taxes, total planned investment, real GDP, total saving, total leakages, and total injections.

Consumption spending $50
 
Capital Stock (end of 2005) $100
 
Capital Stock (end of 2006) $103
 
Change in inventories $0
 
Govt welfare payments $5
 
Govt unemployment insurance pay $2
 
Govt payroll $3
 
Govt outlays for materials $2
 
Depreciation $7
 
Interest Rate 6%
 
FIRST, I guess I am confused with deciding whether something is included in the government purchase, or as a transfer payment. From what I know, welfare payments, unemployment insurance pay, and outlays are all considered TRANSFER, while payroll is the only govt purchase in this situation. I'm not sure, though.
 
I'm also not sure how depreciation plays a role in any of the calculations. It may just be me, because we haven't touched on that topic yet at all.
 
I'm just not really sure where/how to start this problem, and any help would be really great. I'm really confused!

Apr 23 2018 Read more Less More

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