Consider a small country with only three producers, X, Y, and Z, who produce ink
ID: 1140122 • Letter: C
Question
Consider a small country with only three producers, X, Y, and Z, who produce ink, pen, and paper, respectively. Y uses ink (output of X) in its production of pens. X produces 1,255 liters of ink monthly, Y produces 57,737 pens monthly, and Z produces 23 metric tons of paper monthly. X sells all of the ink it produces to Y at a market price of $388 per liter. Y sells 40,987 pens at a market price of $0.14 per pen and stores the rest as inventory. Z sells all of its paper at the market price of $813 per metric ton. The annual market value of production in this economy is $379819. (Round your answer to two decimal places.) In the economy described above, if we measure the economic activity by aggregating the expenditure on final goods of households and firms instead of aggregating production of firms, the annual market value will be the same . This is true since Y's output which was not sold is coded as having been purchased by Y itself Which of the following statements about gross dome and the aggregate accounting identity are not true? (Check all that apply.) different A. The aggregate accounting identity states tha the same B. GDP is a measure of sales to consumers. C. The aggregate accounting identity states that Production Income Expenditure. D. GDP is a measure of production.Explanation / Answer
Annual market value of production = Value of ink produced by X + (Value of Pen –Value of Ink) +(Value of pen by Z- Value of pen purchased)
Annual market value = 388*1255 + ( 57737*0.14-388*1255) +(813*23 -40987*0.14)
Annual Market sale = 4886940 -478856.82 +12960.82 =$ 4421044
Same ( Because production = income = expenditure)
Which was not sold is coded as have been purchased by Y itself
Option A and D because GDP is the valueof all final goods and services produced within the boundaries of the nation.