Assume we used income method to find small countrys gdp why

Reference no: EM13395422

Suppose Small Country has 4 households and 3 businesses. Each of the 4 households purchased $20,000 in food and gasoline consumption and $3,000 in movie tickets this year. Two households purchased a new $10,000 car produced in Small Country and one household purchased the used 2-year old car being replaced by one of those households for $4,000. One household purchased a newly constructed house for $100,000.

Each of the 3 businesses spent $15,000 in new computers, while their existing computers depreciated by $3,000. They each spent $5,000 on intermediate inputs used to produce their ?nal product from other businesses in Small Country. Each business added $1,000 of inventory to their current stock at the end of the year.

The government of small country spent $10,000 on paper and $12,000 on new computers. Existing computers depreciated by $4,000. Small Country exported $12,000 worth of socks and imported all of its gasoline ($15,000
worth).

A. Use the expenditure method to compute Small Country's gross domestic product (GDP = C + I + G + NX).
B. Suppose we used the income method to compute Small Country's GDP. Why do we have to add depreciation to the national income in order to arrive at the GDP?

Reference no: EM13395422

Questions Cloud

Which you justify the importance fo marketing research in : which you justify the importance fo marketing research in the development of kudler fine foods marketing strategy and

Use t-accounts to illustrate the effect of transaction on : your uncle repays a 100 loan from goliath national bank by writing a 100 check from his gnb checking account. use

The two boys each weighing similar get into their sleds and : two boys pull their identical sleds to the top of a hill. one boy loads his sled with bricks while the other boy does

During 2011 trish a self-employed healthcare consultant : during 2011 trish a self-employed healthcare consultant travels from los angeles to atlanta for a 1 week business trip.

Assume we used income method to find small countrys gdp why : suppose small country has 4 households and 3 businesses. each of the 4 households purchased 20000 in food and gasoline

Journalize entries for transactions a through f omit the : on march 1 2012 mitch quade established mitch realty which completed the following transactions during the month a

Evaluate ibmrsquos earnings per share basic and identify : for this assignment read the ibm case update. use the financial statement tobull decompose ibmrsquos roe and discuss

A researcher wishes to develop a new pharmaceutical : a researcher wants to develop a new pharmaceutical compound to treat pain. which of the following strategies will

Globalization was welcomed around the world at the : globalization was welcomed around the world at the beginning of the 1990s. different trade theories were used to

User Account

All Pages