Reference no: EM133268144

Consider an economy with a corn producer, some consumers and a government. In a given year, the corn producer grows 30 million bushels of corn and the market price for corn is $5 per bushel. Of the 30 million bushels produced, 20 million are sold to consumers, 5 million are stored in inventory and 5 million are sold to the government to feed the army. The corn producer pays $60 million in wages to consumers and $20 million in taxes to the government. Consumers pay $10 million in taxes to the government, receive $10 million in interest on the government debt, and receive $5 million in Social Security payments from the government. The profits of the corn producer are distributed to consumers.

1. Calculate GDP using: the product approach, the expenditure approach and the income approach.

2. Calculate private disposable income, private saving, government saving, national saving and the government budget. Is the government budget in.