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
Sandy wants to go on a trip in 10 years. If she invests $1,000 per year at the end of each year for 10 years at a 12% interest r
atroni [7]

Answer:

$17,549

Explanation:

Data given in the question

Number of years = 10

Invested amount = $1,000 per year

Rate of interest = 12%

So by considering the above information, the accumulated amount is

= Invested amount × future value of an annuity for 12% at 10 years

= $1,000 × 17.549

= $17,549

Refer to the Future value of an annuity table

In order to find out the accumulated amount we simply multiplied the invested amount with the factor

5 0
3 years ago
The PRIMARY function of banks in the United States is to a) print money b) make banking laws c) build homes and businesses d) pr
Jobisdone [24]
Im pretty sure its D.

it sounds right
:)


5 0
3 years ago
Read 2 more answers
RKO Company sold bonds with a face value of $850,000 for $910,000. The bonds have a coupon rate of 8 percent, mature in 10 years
Alex73 [517]

Answer:

cash                910,000 debit

  bonds payable                 850,000 credit

  premium on BP                  60,000 credit

-- to record issuance of bonds --

interest expense 63700 debit

amortization                 4300 credit

cash                       68000 credit

--to record coupon payment at December 31th--

Explanation:

issuance:

cash proceed of 910,000 face value of 850,000 the 60,000 difference wil be a premium.

interest entry:

we multiply the carrying value of the bonds by the market rate

we calcualte the cash procees as ussual: face value x bond rate

the difference wil be the amortization on premium

910,000 x 7%  63,700

850,000 x 8% 68,000

amorization       4,300

5 0
3 years ago
Dana has standard consumer preferences over two goods: hours spent watching football (W) and hours spent playing football (P). H
Aleks [24]

Answer:

The correct option is Dana might be indifferent between C, A, and B.

Explanation:

Note: See the attached photo for the indifference curve showing points A, B and C.

The answer can be explained using an indifference curve.

An indifference curve is a graph that depicts the combination of two commodities that provide equal satisfaction or utility to the consumer. A consumer is indifferent between the two commodities at each point on an indifference curve because all points on the curve provide him with the same level of satisfaction or utility.

In the attached photo, bundles A, B and C are plotted as points on the same indifference curve (IC). Since points A, B and C are on the same IC, it therefore implies that Dana might be indifferent between C, A, and B.

Therefore, the correct option is Dana might be indifferent between C, A, and B.

4 0
3 years ago
Historically, a factory has been able to produce a very specialized nano-technology component with 35% reliability, i.e., 35% of
pochemuha

Answer:

Yes

Explanation:

From the given output

The  Probability of getting 13 or more passed

when the  reliability = 0.35. can be calculated as follows

=0.0258+0.0109+0.0039+.0012+0.0004 = 0.0422   ≈  4.2%

Since the probability is less than the  5% level we will therefore reject the Null hypothesis  

answer : YES

5 0
3 years ago
Other questions:
  • Every time andres raises his hand, he receives one point. "raising his hand" is considered the:
    11·1 answer
  • What is an investment report that is given to potential investors called
    5·1 answer
  • What branches or specializations concentrate their efforts and work on business, work and life satisfaction in psychology ?
    7·1 answer
  • A watch manufacturing company has priced its goods at a rate which is higher than what other companies offer. the watches made b
    8·2 answers
  • Sophia's Restaurant served 5,000 meals last quarter.
    10·1 answer
  • Even if controls are in place, most companies require how man many signatures for checks over a certain dollar amount?
    13·2 answers
  • Florida citrus growers say that the recent crackdown on illegal immigration is increasing the market wage rates necessary to get
    13·1 answer
  • Economic growth will A. be faster if more capital per hour is used because of increasing returns to capital. B. slow down or sto
    5·2 answers
  • . Databases may include A. sponsored links. B. purchasing suggestions for library materials. C. requests to access materials via
    6·2 answers
  • AZ-64409 company makes and sells two products: Product W903 and Product Z653. The annual production and sales of Product W903 is
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!