just part (d) and (e) 1Question I - GDP AccountingFor each of the following, describe how the transactions would affect the GDP accounts of the relevant countriesusing the income method, the production method and the expenditure method.(a) Th US exports $100 in solar panels to Japan that are sed in homes. Japan exports $100 to in cars to the US.Of these, 50% are stored in warehouses while the other 0% are sold at price. Report the accounting in bothcountrie(b) The Russian ay has invaded Ukraine. Russian soldiers earn wages of 10,000 Rubles each and use ammunitionthat the government buys for 5,000 Rubles. The ammunition is produced using 2,000 Rubles of imported steeland 100 hours of work D Russian workers; these Russian workers are paid 000 Rubles in total. Do the GDPaccounting. Now assume tha had Russia not invaded Ukraine, soldiers would have still been paid but theammunition would have not beenroduced. Would the GDP in Russia have been hher or lower?(c) The retail company Levi Strauss sells 1000 ieans for a total value of $100,000 to Macy's. May's sells the jeansfor $120 each. Say Levi's sells 50% of its in ntory. Compute the effect on GDP. Next, suppose each pair ofjeans in Levi's inventory is downgraded, such thạt each pair is worth only half of what it was valed before.Compute the contribution to GDP in this scenario.(d) Assume a 16 year old named William Gates writes a computer program in his garage. The software is stored inhis hardware. What is his contribution to GDP? Now, instead assume William Gates incorporates a companycalled Microsoft, with himself as the only employee. Any production cost is attributed to his salary. He stillworks in his garage. He creates the same computer program. Suppose he values the computer program for$20,000. What is the contribution to GDP? What is the money that Bill Gates gets in his bank account bythe end of the year and how much is registered as salaries?(e) Jeremy buys a house for $50,000. When is the transaction part of GDP?

Gross domestic product is the total value of goods and services that are produced in the economy in…

(d) Assume a 16 year old named William Gates writes a computer program in his garage. The software is stored in his hardware. What is his contribution to GDP? Now, instead assume William Gates incorporates a company called Microsoft, with himself as the only employee. Any production cost is attributed to his salary. He still works in his garage. He creates the same computer program. Suppose he values the computer program for $20,000. What is the contribution to GDP? What is the money that Bill Gates gets in his bank account by the end of the year and how much is registered as salaries? (e) Jeremy buys a house for $50,000. When is the transaction part of GDP?

(d) Assume a 16 year old named William Gates writes a computer program in his garage. The software is stored in his hardware. What is his contribution to GDP? Now, instead assume William Gates incorporates a company called Microsoft, with himself as the only employee. Any production cost is attributed to his salary. He still works in his garage. He creates the same computer program. Suppose he values the computer program for $20,000. What is the contribution to GDP? What is the money that Bill Gates gets in his bank account by the end of the year and how much is registered as salaries? (e) Jeremy buys a house for $50,000. When is the transaction part of GDP?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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