Question

Answer this question on the basis of the given information for an economy in 2016. dollar value of resource extraction activity = $20 billion dollar value of production activity = $50 billion dollar value of distribution activity = $80 billion dollar value of final output = $110 billion gross output for this economy in 2016 equals

Answer 1

Answer:

$260 billion

Explanation:

Dollar value of resource extraction activity = $20 billion

Dollar value of production activity = $50 billion

Dollar value of distribution activity = $80 billion

Dollar value of final output = $110 billion

Gross output for this economy in 2016 equals to $260 billion

(In billions) $110+$80+$50+$20=$260

Answer 2

Answer:

$110 billion

Explanation:

GDP can be calculated by using either the value added method or just considering the price of the finished goods, either way the result should be the same:

final value = $110 billion

value added:

• value of resource extraction activity = $20 billion
• value of production activity = $50 billion - $20 billion  = $30 billion
• value of distribution activity = $80 billion - $50 billion = $30 billion
• value of final output = $110 billion - $80 billion = $30 billion

total value added = $20 + $30 + $30 + $30 = $110 billion