Consider two ccountries, the United States and Japan. In the U.S., there are two firms, Pikes peak Steel (PPS) and General Motors (GM), both owned by U.S. citizens. In Japan, there is one firm, Toyota, owned by Japanese citizens. All of the employees of PPS and GM are U.S. citizens and all of the employees of Toyota are Japanese citizens. In a given year, PPS produces $6000 worth of steel and pays wages of $1500. It sells $2000 worth of steel to GM and $4000 worth of steel to Toyota. GM buys $2000 with pf steel from PPS and payes wages of $4000. GM produces $8000 worth of cars during the year; it sells $5500 worth of cars to consumers in thr U.S., $1500 worth of cars to the U.S. government, and $1000 worth of cars to consumers in Japan. Toyota buys $4000 worth of steel from PPS and pays wages of $2500. Toyota produces $9500 worth of cars during the year; it sells $5000 worth of cars to consumers in the U.S., $1000 worth of cars to the Japanese government, and $3500 worth of cars to consumers in Japan. For the U.S. and Japan, calculate the following (show work) Gross domestic product (GDP) using the income and expenditure approaches. (Both income and expenditure approaches will yield the same result)
Consider two ccountries, the United States and Japan. In the U.S., there are two firms, Pikes peak Steel (PPS) and General Motors (GM), both owned by U.S. citizens. In Japan, there is one firm, Toyota, owned by Japanese citizens. All of the employees of PPS and GM are U.S. citizens and all of the employees of Toyota are Japanese citizens.
In a given year, PPS produces $6000 worth of steel and pays wages of $1500. It sells $2000 worth of steel to GM and $4000 worth of steel to Toyota. GM buys $2000 with pf steel from PPS and payes wages of $4000. GM produces $8000 worth of cars during the year; it sells $5500 worth of cars to consumers in thr U.S., $1500 worth of cars to the U.S. government, and $1000 worth of cars to consumers in Japan.
Toyota buys $4000 worth of steel from PPS and pays wages of $2500. Toyota produces $9500 worth of cars during the year; it sells $5000 worth of cars to consumers in the U.S., $1000 worth of cars to the Japanese government, and $3500 worth of cars to consumers in Japan.
For the U.S. and Japan, calculate the following (show work)
Gross domestic product (GDP) using the income and expenditure approaches. (Both income and expenditure approaches will yield the same result)
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