How does the input-output analysis work?
Examines how changes in one economic sector affect others
Compares different economies
Sets the interest rate
Measures income distribution
Answer
Input-output analysis examines how changes in one economic sector affect others. It does this by tracing the flow of goods and services among sectors of the economy. For example, if a change in the agricultural sector leads to a decrease in production, this will likely have a ripple effect on other sectors, such as manufacturing and transportation.
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