Assume an economy with two firms. Firm A produces wheat and firm B produces bread. In a given year, firm A produces 4000 tonnes of wheat, sells 1000 tonnes of wheat to firm B at $20 per tonne, exports 2500 tonnes of wheat at $20 per tonne, and stores 500 tonnes as inventory. Firm A pays $50,000 in wages to consumers. Firm B produces 50,000 loaves of bread and sells all of it to domestic consumers at $3 per loaf. Firm B pays consumers $10,000 in wages. In addition to the 50,000 loaves of bread consumers buy from firm B, consumers import and consume 20,000 loaves of bread, and they pay $2 per loaf for this imported bread. Calculate gross domestic product using a. the product approach b. the expenditure approach c. the income approach
Assume an economy with two firms. Firm A produces wheat and firm B produces bread. In a given year, firm A produces 4000 tonnes of wheat, sells 1000 tonnes of wheat to firm B at $20 per tonne, exports 2500 tonnes of wheat at $20 per tonne, and stores 500 tonnes as inventory. Firm A pays $50,000 in wages to consumers. Firm B produces 50,000 loaves of bread and sells all of it to domestic consumers at $3 per loaf. Firm B pays consumers $10,000 in wages. In addition to the 50,000 loaves of bread consumers buy from firm B, consumers import and consume 20,000 loaves of bread, and they pay $2 per loaf for this imported bread.
Calculate gross domestic product using
a. the product approach
b. the expenditure approach
c. the income approach
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