Question

Thaler Ore Inc. Deaton Steel Kydland Auto Corp. Total Factor Manufacturers Ltd. Intermediate goods Wages Interest payments Rent Profit $0 $1400 $3100 $12,000 $800 $450 $1300 $2300 $1700 $2500 $1750 $3400 $6000 Table-2 16. Table-2: What is the value of intermediate goods for Kydland Auto Manufacturers Ltd.? A $36,700 В $22,400 С $14,900 D $20,200 17. Table-2: What is the GDP of country described in the table? A 38,980 B 27,500 С 37,100 D 36,700

Answer 1

Answer-17 correct option will be D) 36700.

InvoIn method to calculate GDP tells us that GDP is summation of Wages, Interest, Rents and Profits. Here in this question there are three companies, adding all wages, all interest payments, all rents and all profits we get 36700, which is the value of GDP for this country.

Answer-16 For Kydland Auto Manufacturers, the value of intermediate good is not given there, it is missing. There is no way to reach to value of intermediate goods, when all of the above entity like wages, interest, rent and profits are given.

Value added approach is used to calculate value of intermediate goods, but here no information is given for intermediate goods. Therefore, no correct option for this question.