00:02
Hello, let's start with part a.
00:04
In this part we calculate gdp using three different approaches.
00:10
So in the first case we use the product approach.
00:15
So in this case gdp would be equal to...
00:19
Here we have only one product which is corn and the corn producer grows 30 million bushels of corn and the price is 5.
00:33
Dollars so gdp will be equal to 150 million dollars there are no any intermediate goods inputs the second approach is the expenditure approach so gdp here we have expenditure approach let's calculate all expenditures let's start with consumers consumers by 20 million of corn by the price which is five dollars the government buys 5 million bushels of corn by the same price it will be 25 and also we have a 5 million of bushels added by producer to inventory it's also 5 million again multiplied by 5 we have 100 plus 25 plus 25 and this is equal to 150 million and lastly again i make this mistake gdp using the income approach so let's start with workers they have wage income which is 60 million also we need to calculate the revenue of the corn producer and the corn producer has 150 million of corn produced but we need to yeah it will be 150 and also we need to subtract it's not the profit income we need to find the profit we need to find the profit we need to find the expenditures of this producer so it will be the wages 60 million to workers and minus taxes which is 20 million so here we have 150 sorry maybe i can rewrite this 150 million we always use a million this is the income of the producer and also we have the government which has taxes from the producer.
03:45
So we have 60 million of the income of workers, then we have 70 million the income of producer and 20 million of the government and we have 150 million.
04:02
Of course we should have exactly the same amount in all cases.
04:09
Now part b, let's start with private disposable income.
04:15
Private disposable income.
04:19
It will be equal to gdp, which is $150 million, plus the net factor payments, and it's zero, we can skip this, plus government transfers, which is $5 million.
04:46
It's given that 5 million are sold to the government to feed the army.
04:59
So also there's...
05:03
Yeah, i found this 5 million in social security payments.
05:09
So yeah, it's also coming from the government.
05:12
So this is the government transfers, 5 million transfers from the government.
05:24
And plus interest on the government debt.
05:28
It's also 10 million...