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Jim produces and sells $1100 worth of flowers. Jim uses no intermediate inputs. He pays his workers $700 in wages, pays $100 in taxes and pays $200 in interest on a loan. What is Jim\'s contribution to GDP? What are Jim\'s profits? Solution by income approach of calculating GDP, GDP = wages paid to workers + interest = 700+200 = $900 profit = 1100 - 700 - 100 - 200 = $100.

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Jim produces and sells $1100 worth of flowers. Jim uses no intermediate inputs. He pays his workers $700 in wages, pays $100 in taxes and pays $200 in interest on a loan. What is Jim's contribution to GDP? What are Jim's profits? Solution by income approach of calculating GDP, GDP = wages paid to workers + interest = 700+200 = $900 profit = 1100 - 700 - 100 - 200 = $100

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Jim produces and sells $1100 worth of flowers. Jim uses no intermedi.pdf

  • 1. Jim produces and sells $1100 worth of flowers. Jim uses no intermediate inputs. He pays his workers $700 in wages, pays $100 in taxes and pays $200 in interest on a loan. What is Jim's contribution to GDP? What are Jim's profits? Solution by income approach of calculating GDP, GDP = wages paid to workers + interest = 700+200 = $900 profit = 1100 - 700 - 100 - 200 = $100