Homework Week 4 x C Chegg Study | Guided So x Cezto.mheducation.com/hm.tpx Suppo
ID: 1152304 • Letter: H
Question
Homework Week 4 x C Chegg Study | Guided So x Cezto.mheducation.com/hm.tpx Suppose that furniture production encompasses the following stages: Stage 1 Trees are sold to lumber company. Stage 2 Lumber is sold to fumiture company Stage 3 Fumiture company sells fumiture to retail store. Stage 4: Fumiture store sells furniture to consumer. S6,000 $19,000 $24,000 $52,000 Instructions: Enter your responses rounded to the nearest whole number (a) What is the value added at each stage? Stage 1: S Stage 2: $ Stage 3: $ Stage 4: $ (b) How much does this output contribute to GDP? (c) How much would the output contribute to GDP if the lumber were imported from Canada? References eBook&Resources; Worksheet Learning Objective: 05-01 What GDP measures and what it doesn tExplanation / Answer
A) stage 1 value added = $(6000 - 0) = $ 6000
Stage 2 value added = $ ( 19000 - 6000) = $13000
Stage 3 value added = $( 24000 - 19000) = $ 5000
Stage 4 value added = $(52000 - 24000) = $ 28000
(B) contribution to GDP = value of output - value of input = [ (6000 + 19000 + 24000 + 52000) - ( 0 + 6000+ 19000 + 24000) = ( 101,000 - 49000) = $ 52,000
This GDP is always equal to the value of final good or, the total value of all the value added.
C) If the lumber were imported from Canada, the stage 1 and stage 2 value added will not be counted as that is the value added in Canada's GDP.
Therefore, the output contribute to GDP = stage 3 value added + stage 4 value added = $ (5000 + 28000) = $ 33,000
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