1. Calculate the profits made by both firms and transferred to households. Use this information to calculate...
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Question:
1. Calculate the profits made by both firms and transferred to households. Use this information to calculate nominal GDP using the production approach, the expenditure approach, and the income approach.
2. Now suppose that the first farm stops making sausages. It still produces and sells corn, hires, and pays workers and taxes in the same amounts as before. Now, households directly buy pigs from the second farm for $15,000 and produce sausages at home. All other transactions remain the same. Repeat question 1 and then explain the difference (if any) in your answer.
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