Answer to Question #50758 in Macroeconomics for bob
Suppose a company produces $5M worth of output and has sales of $2M each to domestic and foreign customers. It imports $1 M worth of raw material, pays its workers $3M in wages, pays its creditors $2M in interest, and has minus $1M in profits for its owners. This company’s operations add $4M to GDP whether measured by the value added approach, the expenditure approach, or the income approach. Explain in detail: True False or Uncertain
Produces $5M, sales of $2M each to domestic and foreign customers. Imports $1M, $3M in wages, $2M in interest, minus $1M in profits. If measured by the value added approach the company adds 5M - 1M = $4M, if measured by the expenditure approach it adds 1M + 2M + 1M = $4M, and if measured by the the income approach, it adds 3M - 1M + 2M = $4M. So, this company’s operations add $4M to GDP. That's why the statement is True.
Can you please thank the expert who completed the questions. Just went through the questions and they have helped me out alot in understanding some concepts in which l had difficulties with.
Please thank him very much.