Answer to Question #134441 in Macroeconomics for eshal

Question

Last year, a small nation with abundant forests cut down $200 worth of trees. $100 worth of trees were then turned into $150 worth of lumber. $100 worth of that lumber was used to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in the production of trees, lumber, and bookshelves, what is this nation’s GDP? In other words, what is the value of the final goods produced including trees, lumber and bookshelves?

Answer 1

Provided:

The cut down worth of the trees = $200

bookshelves Worth = $250

lumber worth = $150

To find out the nation GDP, we take note of the final goods. in this case the price of book shelves rather than the intermediate goods which are trees and the lumber. Therefore, only $250 is the final goods produced.

Answer $250