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Value added in industry b equals sales in industry b

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In a closed economy two industries exist: Red and Blue. Inventories do not change Industry Red produced all machinery and intermediate inputs of this economy with total sales of 100. It paid 50 on wages, 20 on rent and 15 on interest. Industry Blue produced consumption goods only. It paid 80 in wages, 30 in interest, 25 in rent and it made a profit of 10. 

We want to estimate GPP. Which of the following statements is correct?

  1. Value added in industry A equals sales in industry A. 
  2. Value added in industry B equals sales in industry B. 
  3. This problem cannot be solved because the profit (or loss) in industry Red is unknown 
  4. This problem cannot be solved because the sales of industry Blue is unknown 

Reference no: EM133128291

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