Suppose that an economy shows only the following activities in a specific year: i. It costs an automobile manufacturing company $10 million to assemble 5,000 cars. The cars are then sold to stores for $12million. ii. The stores pay their workers an annual wage of $1 million and then sell the cars directly to the consumers for $15 million.

a. Calculate the GDP in this economy using the production-of-final-goods approach.

b. Calculate the GDP using the value-added approach. Show the value added at each stage of production.

c. Calculate the GDP using the income approach. Show the costs incurred and profits earned.

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Answer a Production Approach The GDP is 15 Million Reason as the final output that i... View the full answer