Answer to Question #101504 in Macroeconomics for Dawinder

Question

Pizza Factori produced $88,000 worth of pizzas in the past year. They paid $39,000 to employees, paid $11,000 for vegetables and other ingredients, and paid $4,000 in taxes. They began the year with ingredient inventories valued at $1,500 and ended the year with inventories valued at $2,000. What was Pizza Factori’s (and their employees') total contribution to GDP this year (in $)?

Answer 1

produced = 88000

paid = 39000

initial inventory = 1500

GDP at the end of the year = 88000 - 39000

=49000

49000 + 1500

= 50500