ECO 2013 Final Examination Instructor: Professor E.M. Egwaoje Instructions/Direc

Question

ECO 2013 Final Examination Instructor: Professor E.M. Egwaoje Instructions/Directions: Answer all questions using your scantron The following table illustrates the value added approach to calculating GDP. Please complete the table. Firm Value of Product Value Added By: Value Added Equals Cotton farmer Raw Cotton-$2 Textile mill Cotton woven into cotton fabric-$4 The textile mill Shirt company The cotton farmer Fabric made into a shirt-$16 The shirt company 12 L.L.Bean Shirt sold on L.L.Bean's websiteL.L.Bean $36 Total Value Added 1. The value added by L.L. bean is A. 2 B. 4 C. 14 D. None of the above The total value added A. Cannot be calculated 2. B. 18 C. 22 D. 36 3. National income is A.GDP minus depreciation. B.GNP plus depreciation. C.GDP minus sales taxes. D.NNP minus income taxes.

Explanation / Answer

ANSWER:

A) The value added by LL bean = shirt sold on LL besn website - fabric made into a shirt = $36 - $16 = $20

so option d is the right answer.

B) The total value added = value added by The cotton farmer + value added by the textile mill + value added by the shirt company + value added by ll bean = 2 + 2 + 12 + 20 = 36

so option d is the right answer.

C) Option a is the right answer as it is the formula of national income.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.