Assume an economy with a coal producer, a steel producer, and some consumers. (There is no government.) In a given year, the coal producer produces 35 million tonnes of coal and sells it for $5 per tonne. The coal producer pays $80 million in wages to consumers. The steel producer uses 55 million tonnes of coal as an input into steel production, all purchased at $5 per tonne. Of this, 35 million tonnes of coal comes from the domestic coal producer, and 20 million tonnes is imported. The steel producer produces 14 million tonnes of steel and sells it for $40 per tonne. Domestic consumers buy 12 million tonnes of steel, and 2 million tonnes are exported. The steel producer pays consumers $70 million in wages. All profits made by domestic producers are distributed to domestic consumers. a. Determine GDP using (i) the product approach, (ii) the expenditure approach, and (iii) the income approach. (i) Using the product approach, the value added by the coal producer is $ million, the value added by the steel producer is $ million, and GDP in this economy is million.

Assume an economy with a coal producer, a steel producer, and some consumers. (There is no government.) In a given year, the coal producer produces 35 million tonnes of coal and sells it for $5 per tonne. The coal producer pays $80 million in wages to consumers. The steel producer uses 55 million tonnes of coal as an input into steel production, all purchased at $5 per tonne. Of this, 35 million tonnes of coal comes from the domestic coal producer, and 20 million tonnes is imported. The steel producer produces 14 million tonnes of steel and sells it for $40 per tonne. Domestic consumers buy 12 million tonnes of steel, and 2 million tonnes are exported. The steel producer pays consumers $70 million in wages. All profits made by domestic producers are distributed to domestic consumers. a. Determine GDP using (i) the product approach, (ii) the expenditure approach, and (iii) the income approach. (i) Using the product approach, the value added by the coal producer is $ million, the value added by the steel producer is $ million, and GDP in this economy is million.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Measuring A Nation's Income

Section: Chapter Questions

Problem 9PA

See similar textbooks

Similar questions

Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100 worth of trees into 150 worth of lumber. It used 100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nations GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?
Suppose an economy produces only 2 products that will also be used for directconsumption, as per the article at the end of the exam: chicken wings and donuts. Inthe second quarter of 2021 (the base period), 180,000 pounds of chicken wings wereproduced, at a value of $3.50 per pound, while in the second quarter of 2022,production of chicken wings increased to 200,000 pounds, at a value of $3.75 perpound. In the second quarter of 2021 (the base period), 85,000 donuts were producedat a value of $0.85 per donut, while in the second quarter of 2022, donut productionincreased to 100,000 donuts, each at a value of $0.95 per donut. The population inthis economy is 1000 individuals in 2022, while the number of hours worked in 2022is 5000. Also, the quantities that were produced in 2021 represent the quantities thatwere purchased by the typical household, meaning that everything that was producedwas sold.d. Solve for the amount of labor productivity in the second quarter of 2022.e. Solve for the…
Gross Domestic Product Explain how net exports affect the US economy. Describe both positive and negative impacts on GDP. Why do national income accountants use net exports to compute GDP, rather than simply adding exports to the other expenditure components of GDP? You have the following information on 3 countries: Soccerland, Handeggland, and Neverland How long will it take until Soccerland’s GDP increases by 75%? How long will it take until Soccerland and Handeggland have the same GDP? Soccerland’s population is not happy that, eventually, Handeggland is going to have higher GDP than their country. They feel that they are a much better country, so they are going to work harder to ensure that Handeggland will never catch up with Soccerland. If Soccerland’s new growth rate is constant every year, what is the minimum growth rate that ensures that Soccerland will always have a higher GDP than Handeggland? Neverland’s ambition is to host the World Cup. At the…
You are given the following information about an economy: $millionsGDP at Market Prices 1,669.4Imports 290.5Gross Domestic Capital Formation 48.7Income accruing to the Public Sector 39.0Retained Business Earnings 75.9Exports 273.4Subsidies 16.8Factor Payments from Abroad 10.0Capital Consumption Allowance…
One day, Chinedu the Barber, Inc., collects D400 for haircuts. Over this day, his equipment depreciates in value by D50. Of the remaining D350, Chinedu sends D30 to the government in sales taxes, takes home D220 in wages, and retains D100 in his business to add new equipment in the future. From the D220 that Chinedu takes home, he pays D70 in income taxes. Based on this information, compute Chinedu’s contribution to the following measures of income. gross domestic product net national product national income personal income disposable personal income
Assume an economy with two firms: a coffee beans producer and a coffeeshop. In a given year, a coffee beans producer grows 75,000 tonnes of coffee beans, sells 50,000tonnes of coffee beans to the local coffee shop at $50 per tonne, exports 20,000 tonnes of coffeebeans at $50 per tonne, and stores 5,000 tonnes as inventory. The coffee producer pays $100,000in wages to consumers. The coffee shop produces 1,000,000 cups of coffee and sells all of it todomestic consumers at $4 a coffee. The coffee shop pays consumers $400,000 in wages. Inaddition to the 1,000,000 coffees consumers buy from the local coffee shop, they (consumers)import and consume 300,000 cups of coffee (coffee pods), and they pay $2 per a coffee pod.Calculate gross domestic product using• the product approach,• the expenditure approach, and• the income approach. PLEASE SHOW ALL HAND WRITTEN WORK AND STEPS!!
Using the following national income accounting data, compute GDP, NDP, and NI. All figures are in billions. Round your answers to one decimal place. category value compensation of employees $ 196.2 U. S. exports of goods and services 19.8 Consumption of fixed capital 11.8 government purchases 59.4 taxes on production and imports 14.4 net private domestic investment 52.1 transfer payments 13.9 U. S. imports of goods and services 16.5 personal taxes Net foreign factor income Personal consumption expenditures Statistical discrepancy 40.5 2.2 219.1 0