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National Income Accounting
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Date Posted: 05:08:05 05/23/04 Sun
2. Use the following information to construct GDP using the sum of income approach and Expenditure approach (1999).
a. There are thousands of farmers and two big businesses in Trivia land: Specific Motors (an auto company) and Super Duper (a chain of food markets). There is no government or depreciation.
b. Specific motors produced 1,000 small cars, which sold at $6,000 each, and 100 trucks, which sold at $8,000 each. Consumer bought 800 of the cars, and the remaining 200 cars were exported to Jamaica. Super Duper bought all the trucks.
c. Sales at Super Duper markets amounted to $14 million, all of it sold to consumers.
d. All the farmers in Trivia land are self-employed and sell all their wares to Super Duper.
e. The cost incurred by all the business were as follows:
Specific Motors Super Duper Farmers
Wages 3,800,000 4,500,000 2,000,000
Interest 100,000 200,000 700,000
Rent 200,000 1,000,000 2,000,000
Purchase of Food 0 7,000,000 0
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