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# Answer to Question #50758 in Macroeconomics for bob

Question #50758
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 1 Expert's answer 2015-02-18T10:13:06-0500 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&rsquo;s operations add \$4M to GDP.
That&#039;s why the statement is True.

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