Calculate GDP as the sum of value added.

Home  ›  Uncategorized  ›  Calculate GDP as the sum of value added.
Calculate GDP as the sum of value added.
February 20, 2023 Comments Off on Calculate GDP as the sum of value added. Uncategorized Assignment-help
Words: 82
Pages: 1
Subject: Uncategorized

Consider an economy with three firms: • Firm 1 sells $75 of steel to Firm 3. From its earnings, it pays $25 in wages and keeps $50 in profits. • Firm 2 sells $30 of rubber to Firm 3. Firm 2 pays $10 in wages and keeps $20 in profits. • Firm 3 sells $240 of cars to households. It pays for its inputs (from Firm 1 and Firm 2); keeps one third of its remaining earnings as profits,and pays two thirds in wages. Let’s calculate GDP various ways. (b) Calculate GDP as the sum of value added.