Suppose that the economy is made up of a single firm, which buys $400 of intermediate goods, pays $200 in its labour costs, and pays $2,000 in rental costs for its building. The rest of its revenues are paid out to the owners of this firm. This firm also produces $11,000 of its final product, selling $6,000 to domestic consumers, keeping $1,000 to replenish its inventories, and selling the rest abroad. In this little economy, what is Total GDP using the Expenditure Approach?
Suppose that the economy is made up of a single firm, which buys $400 of intermediate goods, pays $200 in its labour costs, and pays $2,000 in rental costs for its building. The rest of its revenues are paid out to the owners of this firm. This firm also produces $11,000 of its final product, selling $6,000 to domestic consumers, keeping $1,000 to replenish its inventories, and selling the rest abroad. In this little economy, what is Total GDP using the Expenditure Approach?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Suppose that the economy is made up of a single firm, which buys $400 of intermediate goods, pays $200 in its labour costs, and pays $2,000 in rental costs for its building. The rest of its revenues are paid out to the owners of this firm.
This firm also produces $11,000 of its final product, selling $6,000 to domestic consumers, keeping $1,000 to replenish its inventories, and selling the rest abroad.
In this little economy, what is Total
Note: Round your answers to two decimal places. Note, if your answer is $138,999.00, input this as 138999.00.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education