Answer to Question #195478 in Macroeconomics for malaika

Question

Use the information given and show in a table format how value added method is used to

Calculate GDP. 

1.     A forester chops down 200 trees and sells them @ N$50 each to the coal factory on a farm. The coal factory processes these trees into coals and sells the coal @ N$20 000 to the coal wholesaler’s. The coal wholesaler’s goes to the market and sell 500 bags of coal’s @N$100 each to pick n Pay.  Pick n Pay sells the 500 bags of coal’s @ N$150 each to its customers. According to this example, how much value added do the coals contribute to the GDP?

Answer 1

Value added do the coals contribute to the GDP= N$ 75 000