Question

es amounting to 00,000 on Super 168 Part 2 The Macroeconomy: Aggregate omy: Aggregate Supply and Demand the go wx on all was aplicate Trivialand in the fol- the same questions. Also calcu- The government levied sales taxes $500,000 on Specific Motors and $200 m per (but none on farmers). In addition ernment levied a 10 percent income tax interest, and rental income. d. In addition to the food and cars men Test Yourself Question 2, consumers in imported 500 computers from the United $2,000 each and mentioned in in Trivialand United States a 3. (More difficult Now complicate Trivial lowing ways and answer the same questions late national income and disposable income." a. The government bought 50 cars, leaving only for export. In addition, the government spent 50 on wages and made $1,200,000 in transfer payments b. Depreciation for the year amounted to $600,000 for Specific Motors and $200,000 for Super Duper. (The farmers had no depreciation.) DEI UN Suported 500 Question oss domestic Discussion Questions 3. Explain why national income and gross dom product would be essentially equal if there wer depreciation 1. Explain the difference between final goods and interme- diate goods. Why is it sometimes difficult to apply this distinction in practice? In this regard, why is the concept of value added useful? 2. Explain the difference between government spending and government purchases of goods and services (G). Which is larger?

Answer 1

Dear Student,

This are two different concepts

Final goods refer to those goods which are used either for consumption or for investment.

1.Goods purchased by consumer households as they are meant for final consumption (like milk purchased by households).

2. Goods purchased by firms for capital formation or investment (like machinery purchased by a firm).

It must be noted that final goods are neither resold nor used for any further transformation in the process of production.

Examples : Food, gasoline, clothing, and televisions are examples of final goods if used by households

An intermediate good is a product used to produce a final good or finished product—also referred to as a consumer good.

National income is "estimate that measures the volume of commodities and services turned out during a given period counted without duplication." Whereas, GDP is the estimate that measures the money value of commodities within domestic territory.

Thank You !!