ECON 2HH3 Study Guide - Gdp Deflator, Pearson Education, Income Approach
8 Mar 2014
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Problems: product accounting adds up value added by all producers. The wheat producer has no intermediate inputs and produces 3 million tonnes at /tonne for million. The bread producer produces 100 million loaves at . 50/loaf for million. The bread producer uses million worth of wheat as an input. Therefore, the bread producer"s value added is million. Total gdp is therefore, million + million = Expenditure accounting adds up the value of expenditures on final output. Consumers buy 100 million loaves at . 50/loaf for million. The wheat producer adds 0. 5 million tonnes of wheat to inventory. Therefore, investment spending is equal to 0. 5 million tonnes of wheat valued at /tonne, which costs million. Total gdp is, therefore, million + million = million: coal producer, steel producer, and consumers, i) product approach: coal producer produces 15 million tonnes of coal at.
