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GDP and CPI: Tracking the Macroeconomy - End of Chapter Question 4. The small economy of Pizzania produces three goods (bread, cheese, and pizza), each produced by a separate company. The bread and cheese companies produce all the inputs they need to make bread and cheese, respectively. The pizza company uses the bread and cheese from the other companies to make its pizzas. All three companies employ labor to help produce their goods, and the difference between the value of goods sold and the sum of labor and input costs is the firms profit. The accompanying table summarizes the activities of the three companies when all the bread and cheese produced are sold to the pizza company as inputs in the production of pizzas BreadCheese Pizza company company company $50 (bread) Cost of inputs Wages Value of output S0 15 50 SO 35 (cheese) 20 35 75 200 a. Calculate GDP as the value added in production b. Calculate GDP as spending on final goods and services c. Calculate GDP as factor income

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