Chapter 8, Problem 20P

To determine

the total dollar amount that is added o the nation’s gross domestic product

Concept introduction:

The circular flow: It is described as the circular flow of money and goods and services in the economy. In which the factors of production are supplied by the house holds to the firm as land, labour, capital and organization in reward the house holds earn factor incomes such as rent, wages, interest and profit. The firm uses factors of production and produce goods and services which are supplied to the households, in turn the firms receive the monetary value of the goods and services and that are the total value of output.

GDP: GDP is the money value of all final goods and services produced with in the domestic territory of the country.