The Happy Land is an isolated island with three sectors: agriculture, manufacturing, and services. This year, the total revenue for the service sector was $20 million of which $5 million was spent on buying raw materials from the agricultural sector. The output of the agricultural sector was $10 million, and its output was sold to the manufacturing and service sectors. The total revenue for the manufacturing sector was $25 million. The total labour income was $25 million and the total consumption expenditure was $20 million. Explain briefly the three approaches to calculate GDP and their relationship with each other. Compute the GDP of Happy Land and explain how you can only use one of the approaches to calculate the GDP of the Happy Land based on the information given.

The Happy Land is an isolated island with three sectors: agriculture, manufacturing, and services. This year, the total revenue for the service sector was $20 million of which $5 million was spent on buying raw materials from the agricultural sector. The output of the agricultural sector was $10 million, and its output was sold to the manufacturing and service sectors. The total revenue for the manufacturing sector was $25 million. The total labour income was $25 million and the total consumption expenditure was $20 million. Explain briefly the three approaches to calculate GDP and their relationship with each other. Compute the GDP of Happy Land and explain how you can only use one of the approaches to calculate the GDP of the Happy Land based on the information given.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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