Q3. In a simple economy, suppose that all income is either compensation of employees or profits. Suppose also that there are no indirect taxes. Calculate gross domestic product from the following set of numbers. Show that the expenditure approach and the income approach add up to the same figure Consumption Investment 10 $9,500 3,000 Depreciation Profits 1,750 2,400 Exports Compensation of employees Government purchases Direct taxes 850 11,500 3,200 1,200 Saving Imports 1,600 900

Q3. In a simple economy, suppose that all income is either compensation of employees or profits. Suppose also that there are no indirect taxes. Calculate gross domestic product from the following set of numbers. Show that the expenditure approach and the income approach add up to the same figure Consumption Investment 10 $9,500 3,000 Depreciation Profits 1,750 2,400 Exports Compensation of employees Government purchases Direct taxes 850 11,500 3,200 1,200 Saving Imports 1,600 900

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

ChapterD: The Expenditure-output Model

Section: Chapter Questions

Problem 24CTQ: Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on...

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