samplenipa - National Income and Product Accounting...

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National Income and Product Accounting Problems 1. Consider an economy with two producers: a wheat producer and a bread producer. In a given year, the wheat producer grows 30 million bushels of wheat, of which 25 million bushels are sold to the bread producer at $3 per bushel, and 5 million bushels are stored by the wheat producer to use as seed for next year's crop. The wheat producer's only other costs are the wages of its workers. Suppose that total wages paid by the wheat producer equal $60 million. The bread producer produces and sells 100 million loaves of bread to consumers for $3.50 per loaf. The bread producer's only other cost is its employee's wages, which equal $200 million. There is no government in this economy. Complete a production statement for the two businesses, and compute GDP in this economy using product approach, the income approach and the expenditure approach. What is the level of investment in this economy? HINT: what is the status of bushels of wheat stored as seed? 2.
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This note was uploaded on 07/17/2008 for the course ECON 502.01 taught by Professor Mccafferty during the Spring '08 term at Ohio State.

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samplenipa - National Income and Product Accounting...

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