Assume that the table below summarizes the income of Paraguay. Category Wages In

Question

Assume that the table below summarizes the income of Paraguay. Category Wages Interest Total business expenditures Total business revenues Value (billions of $) 8.3 0.7 21.0 30.0 Instructions: Round your answers to the nearest dollar a. Profits = $ b. Calculate the GDP of Paraguay using the income approach. billion. billion. c. What would GDP be if you were to use the value-added approach? billion. d. What would GDP be if you were to use the expenditure approach? billion. References eBook & Resources Learning Objective: 07-03 approaches that are used Numeric Response

Explanation / Answer

a. Profits = Total business revenue – Total business expenditure= $30-$21=$9 billion.

b.   Wages + Interest + Rental income or interest+ Profits = $8.3 + $0.7 + $9 = $18 billion.

      c.   $18 billion: All methods of calculating GDP result in the same value.

      d.   $18 billion: All methods of calculating GDP result in the same value.

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