GDP problem. Suppose that a simple economy produces only four goods and senders:
ID: 1091600 • Letter: G
Question
GDP problem.
Suppose that a simple economy produces only four goods and senders: sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals 3,090 units, $7,250 $8,750 $9,750 Answer: C Those two questions I need process with steps and formula. Suppose that a simple economy produces only four goods and services: shoes, DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households. Using the information in the above table, normal GDP tor this simple economy equals 3.090 units. $7.250. $8,750. Answer: C Those two questions I need process with steps and formula. Suppose that a simple economy produces only four goods and services: shoes, DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households. Using the information in the above table, normal GDP tor this simple economy equals 3.090 units. $7.250. $8,750. Answer: C Those two questions I need process with steps and formula. $7,400. $6,400. $5,800. $2,440 units I need someone give me the calculation with clear steps.Explanation / Answer
In order to calculate the nominal GDP, you need to distinguish between intermediate goods (used for further production) and final good. The nominal GDP is the sum of all final goods and services produce in the domestic economy in a given period. Accordingly if one goes by this definition, the coffee beans will not be added in the nominal GDP because whole lot is used in the further production of coffee drinks. One more thing, coffee drinks will automatically account the value of coffee been when it is being used in production. So leaving aside the coffee bean the value comes out to be $8,750
Quantity
Price
Value of Quantity (Quantity*Price)
50
35
1750
40
75
3000
1000
4
4000
2000
0.5
-
Total
$8,750
The same methodology applied in the second case except that you need to deduct 1000 from the quantity. This is because 1000 tomatoes have gone for further production in ketchup.
Quantity
Price
Value of Quantity (Quantity*Price)
40
60
2400
100
18
1800
1000
1
1000
300
4
1200
Total
$6,400
Quantity
Price
Value of Quantity (Quantity*Price)
50
35
1750
40
75
3000
1000
4
4000
2000
0.5
-
Total
$8,750
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