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Consider an economy with a corn producer, some consumers, and a government. In a given year, the corn producer grows 21 million tonnes of corn, and the market price for corn is $70 per tonne. Of the 21 million tonnes produced, 12 million tonnes are sold to consumers, 4.5 million are stored in inventory, and 4.5 million are sold to the government to feed the army. The corn producer pays $55 million in wages to consumers and $10 million in taxes to the government. Consumers pay $20 million in taxes to the government, receive $10 million in interest on the government debt, and receive $5 million in Canada Pension Plan payments from the government. The profits of the corn producer are distributed to consumers. a. Calculate GDP using (i) the product approach, (ii) the expenditure approach, and (i) the income approach. (1) Using the product approach, the value added by the corn producer is SO million, the value added by other entities is SO million, and GDP in this econom is SO million. (i) Using the expenditure approach, C = $ million, I= $O million, G = $ million, NX = s] million, and GDP in this economy is $ million. (ii) Using the income approach, after-tax profits for the corn producer are SO million, total wage income is S million, taxes less subsidies on products and factors of production are $ million, and GDP in this economy is SO million. b. Private disposable income is SO million. Private sector saving is S million. Government saving is S million. The government budget is National saving is $ million. not in surplus or deficit. in surplus. in deficit.

Consider an economy with a corn producer, some consumers, and a government. In a given year, the corn producer grows 21 million tonnes of corn, and the market price for corn is $70 per tonne. Of the 21 million tonnes produced, 12 million tonnes are sold to consumers, 4.5 million are stored in inventory, and 4.5 million are sold to the government to feed the army. The corn producer pays $55 million in wages to consumers and $10 million in taxes to the government. Consumers pay $20 million in taxes to the government, receive $10 million in interest on the government debt, and receive $5 million in Canada Pension Plan payments from the government. The profits of the corn producer are distributed to consumers. a. Calculate GDP using (i) the product approach, (ii) the expenditure approach, and (i) the income approach. (1) Using the product approach, the value added by the corn producer is SO million, the value added by other entities is SO million, and GDP in this econom is SO million. (i) Using the expenditure approach, C = $ million, I= $O million, G = $ million, NX = s] million, and GDP in this economy is $ million. (ii) Using the income approach, after-tax profits for the corn producer are SO million, total wage income is S million, taxes less subsidies on products and factors of production are $ million, and GDP in this economy is SO million. b. Private disposable income is SO million. Private sector saving is S million. Government saving is S million. The government budget is National saving is $ million. not in surplus or deficit. in surplus. in deficit.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Consider an economy with a corn producer, some consumers, and a government. In a given year, the corn producer grows 21 million tonnes of corn, and the market price for corn is $70 per tonne. Of the 21 million tonnes produced, 12 million tonnes are sold to consumers, 4.5 million are stored in inventory, and 4.5 million are sold to the government to feed the army. The corn producer pays $55 million in wages to consumers and $10 million in taxes to the government. Consumers pay $20 million in taxes to the government, receive $10 million in interest on the government debt, and receive $5 million in Canada Pension Plan payments from the government. The profits of the corn producer are distributed to consumers. a. Calculate GDP using (i) the product approach, (ii) the expenditure approach, and (ii) the income approach. (i) Using the product approach, the value added by the corn producer is S million, the value added by other entities is S is s million. million, and GDP in this economy (i) Using the expenditure approach, C = $| |million, I= $ million, G = $ million, NX = 5 million, and GDP in this economy is $ million. (iii) Using the income approach, after-tax profits for the corn producer are S million, total wage income is S factors of production are S million, and GDP in this economy is S million. million, taxes less subsidies on products and b. Private disposable income is $ million. Private sector saving is S million. Government saving is S million. The government budget is National saving is Ss million. not in surplus or deficit. in surplus. in deficit.
Transcribed Image Text:Consider an economy with a corn producer, some consumers, and a government. In a given year, the corn producer grows 21 million tonnes of corn, and the market price for corn is $70 per tonne. Of the 21 million tonnes produced, 12 million tonnes are sold to consumers, 4.5 million are stored in inventory, and 4.5 million are sold to the government to feed the army. The corn producer pays $55 million in wages to consumers and $10 million in taxes to the government. Consumers pay $20 million in taxes to the government, receive $10 million in interest on the government debt, and receive $5 million in Canada Pension Plan payments from the government. The profits of the corn producer are distributed to consumers. a. Calculate GDP using (i) the product approach, (ii) the expenditure approach, and (ii) the income approach. (i) Using the product approach, the value added by the corn producer is S million, the value added by other entities is S is s million. million, and GDP in this economy (i) Using the expenditure approach, C = $| |million, I= $ million, G = $ million, NX = 5 million, and GDP in this economy is $ million. (iii) Using the income approach, after-tax profits for the corn producer are S million, total wage income is S factors of production are S million, and GDP in this economy is S million. million, taxes less subsidies on products and b. Private disposable income is $ million. Private sector saving is S million. Government saving is S million. The government budget is National saving is Ss million. not in surplus or deficit. in surplus. in deficit.
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