During a given year, the following activities occur in a simple economy consisting of a miller and a baker:
• The miller pays his workers $ 250,000 to mill 120 tons of flour. The flour is then sold to a baker for $ 530,000.

• The baker pays his workers $ 340,000 to make 750,000 loaves of bread, which she then sells directly to consumers for $ 1,000,000.

a. Using the "final goods" approach, what is the GDP in this economy?

b. What is the value added at each stage of production? Using the "value added" approach, what is GDP?

c. What are the total wages and profits earned? Using the income approach, what is GDP?

Answer rating: 100% (QA)

a The final goods approach is calculated by adding all final expenditures GDP Consumption Investment ... View the full answer