ECON 2400 Study Guide - Midterm Guide: Income Approach, Price Controls, Government Spending
25 Nov 2012
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Good luck: 35 points the economy consists of a coconut producer, a restaurant, consumers, and a government. The coconut producer produces 10 million coconuts which are sold for each. It pays million in wages, sh. 5 million in interest on a loan to some consumers, and . 5 million in taxes to the government. Of the 10 million coconuts produced, 6 million are used by the restaurant which sells million in meals to consumers. The restaurant pays its workers million in wages, and the government. The government provides national security by paying the armed. Forces . 5 million dollars in wages. (a) calculate the gdp of this country using the value added, expenditure, and. This is identical to the example on page 34 in the textbook. (b) suppose now that the government is more generous to its armed forces even though the threat by foreign invaders did not change at all.
