Textbook Practice - GDP calculating. Assume an economy with two firms and a government. Firm A produces wheat and firm B produces bread. In a given year, firm A produces 50,000 bushels of wheat, sells 20,000 bushels of wheat to firm B at $3 per bushel, exports 25,000 bushels of wheat at $3 per bushel, and stores 5,000 bushels as inventory. Firm A pays $50,000 in wages to consumers and $20,000 as sales tax. Firm B produces 50,000 loaves of bread, and sells all of it to domestic consumers at $2 per loaf. Firm B pays $20,000 in wages and $5,000 as sales tax. In addition to the 50,000 loaves of bread consumers buy from firm B, consumers import and consume 10,000 loaves of bread, and they pay $1 per loaf for this imported bread. Government collects $25,000 sales tax, but pays $35,000 unemployment insurance (so the government's budget deficit is $10,000). Calculate gross domestic product for the year using
1) the product approach
2) the expenditure approach
3) the income approach.
I got $190,000 for them all, however, I think I did the expenditure approach incorrect.
