1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
BARSIC [14]
3 years ago
13

Consider an economy with a corn producer, some consumers, and a government. In a given year, the corn producer grows 30 million

bushels of corn and the market price for corn is $5 per bushel. Of the 30 million bushels produced, 20 million are sold to consumers, 5 million are stored in inventory, and 5 million are sold to the government to feed the army. The corn producer pays $60 million in wages to consumers and $20 million in taxes to the government. Consumers pay $10 million in taxes to the government, receive $10 million in interest on the government debt, and receive $5 million in Social Security payments from the government. The profits of the corn producer are distributed to consumers.
Required:
a. Calculate GDP using (i) the product approach, (ii) the expenditure approach, and (iii) the income approach.
b. Calculate private disposable income, private sector saving, government saving, national saving, and the government deficit. Is the government budget in deficit or surplus?
Business
1 answer:
lys-0071 [83]3 years ago
8 0

Answer:

a. <u>GDP using product approach</u>

There are no intermediate goods inputs. Corn producer grows 30 million bushels of corn and each bushel of corn worth is $5.

GDP = 30 million * $5

GDP = $150 million

<u>GDP using expenditure approach</u>

i) Consumers buy 20 million bushels of corn

Consumption = 20 million * 5

Consumption (C) = $100 million

ii) Corn producer adds 5 million bushels to inventory

Investment = 5 million * $5

Investment (I) = $25 million

iii) Government buys 5 million bushels of corn  

Government spending = 5 million * $5

Government spending (G) = $25 million

GDP = C + I + G

GDP = $100 + $25 + $25  

GDP = $150 million

<u>GDP using income approach</u>

Profit income = $150 million - $60 million - $20 million

Profit income = $70 million

Government income = Taxes paid by the corn producer = $20 million

GDP = $60 million + $70 million + $20 million

GDP = $150 million

b. Private disposable income = GDP + Net factor payments + Government transfers + Interest on the government debt - Total taxes

Private disposable income = $150 million + 0 + $5 million + $10 million - $30 million

Private disposable income = $135 million

 

Private savings = Private disposable income - Consumption

Private savings = $135 million - $100 million

Private savings = $35 million

Government savings = Government tax income - Transfer payments - Interest on the government debt - Government spending

Government savings = $30 million - $5 million - $10 million - $5 million

Government savings = $10 million

National savings = Private savings + Government savings

National savings = $35 million + $10 million

National savings = $45 million

Government budget surplus = Government savings = $10 million

Government deficit = (-) $10 million

You might be interested in
Which strategy is an example of how companies may upgrade themselves to meet changing customer preferences?
never [62]

The best example of how companies are upgrading themselves to meet changing customer preferences is personified in option (C) making online shopping services available.

Since customers nowadays prefer to shop online more often than not, many companies are now providing online marketplaces in combination with their traditional brick and mortar stores. Some companies do not even have a pop up store – they purely do their transactions online.

8 0
3 years ago
Assume the initial present value of the payments on a lease are equal to the cost of the leased asset. This capital lease is rec
Whitepunk [10]

Answer: D) present value of the remaining lease payments.

Explanation:

When recording a capital lease in the balance sheet of the lessee, the amount recorded is the<em> lower amount </em>between the present value of the remaining lease payments or the cost of the leased asset.

As the <em>cost</em> of the leased asset is <em>equal</em> to the <em>initial</em> present value of the payments, the cost will therefore be higher than the current present value of the remaining payments so the appropriate amount to put in the balance sheet will be the current present value of the remaining lease payments.

4 0
3 years ago
Relish Corp. is a famous fast food chain in the United States. However, increasing competition affects the company's market. Nic
Gwar [14]

Answer:

Participative leadership style

Explanation:

Path goal theory is a  leadership theory that specifies the leadership style that should be used in an organization to achieve a goal based on the employees and the working environment. The following steps are to be taken based on the path goal theory:

  1. Determine the employee and environmental uniqueness based on their needs.
  2. Selecting a leadership style and adjusting this style based on the employees need.
  3. Focusing on how to motivate the employee to achieve the goal

Participative leadership style is a style in which leaders involves their subordinates by asking them for suggestions before making a decision. This style is best used when subordinates are highly involved and trained.

8 0
3 years ago
Read 2 more answers
Which of these should you consider while communicating in a diverse workplace?
Ivahew [28]

Answer:

A. Culture

Explanation:

Culture is very important and is reflective of how people communicate and etc. For example, the big business setting in China differs from America, so you would want to know how to be respectful of their culture. In China, when giving and receiving business cards, you have to accept it with two hands, not one hand. Failure to do so will cause you to look rude!

I hope this helps clear things up!

6 0
3 years ago
Which of the following is NOT considered personal information?
Anastasy [175]
Can you reply to this with the options so i can answer ^^
5 0
3 years ago
Other questions:
  • Problem 13-22 The injection molding department of a company uses an average of 30 gallons of special lubricant a day. The supply
    8·1 answer
  • Which investment has the least liquidity? mutual fund house checking account corporation Mark this and return Save and Exit Next
    12·2 answers
  • Sheffield Corporation had net credit sales of $14300000 and cost of goods sold of $9070000 for the year. The average inventory f
    7·2 answers
  • Capri Boat Corporation uses a job order cost system and applies overhead based on a percentage of direct labor cost. Cost flows
    13·1 answer
  • Your company purchases new equipment for $80,000 and depreciates it on a straight line basis over a 5 year period resulting in a
    15·1 answer
  • What is the difference between limited liability and unlimited liability
    7·1 answer
  • Problem 4-53 (Algo) Special Order (LO 4-1, 2) Unter Components manufactures low-cost navigation systems for installation in ride
    10·1 answer
  • If a strategic plan is failing to meet its objectives, but the company's execution is deemed sufficient, management should first
    10·1 answer
  • Select all that is false about lien digital
    5·1 answer
  • According to Dr. Ridel's Levels of Critical Thinking in Chapter 1, what level of critical thinking applies to your current statu
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!