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# Holukuluku County

### A Hypothetical Direct Coefficient Table

##### (http://faculty.washington.edu/krumme/350/exercises/holuku.html)

Supporting Pages:

This is a table of hypothetical direct coefficients for the Greater Holukuluku Economy:

 T0: A FP A I M PU T O FROM: (1) (2) (3) (4) (5) (6) (7) (8) (1) Agricul .15 .5 0 .2 0 .1 .05 0 (2) Food 0 ,06 0 0 0 0 .2 0 (3) Appar 0 .04 .1 0 0 0 .1 .05 (4) Iron .1 .1 .05 .1 .1 .1 0 .15 (5) Machin .1 .05 .15 .07 .2 .1 .05 .1 (6) Publ Ut .05 0 .1 .03 .05 .04 .05 .05 (7) Trade .2 0 0 0 0 .06 .05 .03 (8) Other 0 0 .05 .1 .15 .2 0 .07 Imports .1 .05 .15 .2 .2 .3 .2 .2 Houshd .3 .2 .4 .3 .3 .1 .3 .35

Questions:

1. Why is there no "final demand Column in this table?
2. Which industry is the most labor intensive?
3. Give an example of a transaction consistent with row 6 and column 3
4. "a \$1.00 increase in the output of trade (7) would increase income to food products workers by at least 4 cents." Explain!
5. Does the entry in row 3, col. 4 -- "0" -- mean that, when the direct plus the indirect effects are taken into account, a \$1.00 increase in Iron output will have no effect on the apparel industry? Explain.
6. Would further disaggregation of the sectors tend to increase or decrease the stability of the coefficients over time?
7. Select a coefficient (each) which you think
1. will be particularly stable
2. might fluctuate
3. will increase
4. will decrease over time. Why?

What we have done so far is to explore backward, indirect linkages, one by one and only through one or two rounds. Let's now concentrate on sector 7 and pursue this backward tracing of impacts somewhat more systematically. We will start by linking sector 7 backwardly to sector 2 via two links.

Next Steps: