4.7 Leontief Input–Output Analysis

Question 1

What is an important use of matrices?

Answer 1

An important application of matrices and their inverses is** input–output analysis. **

Question 2

How do we get the technology matrix?

Answer 2

Question 3

What is an important part of compiling a technology matrix?

Answer 3

Labeling the rows and columns of the technology matrix with the first letter of
each industry is an important part of the process. The same order must be used
for columns as for rows, and that same order must be used for the entries of D
(the final demand matrix) and the entries of X (the output matrix). In this book we
normally label the rows and columns in alphabetical order.

Question 4

Solution to a two part input-output system

Answer 4