LO 1 Assume an economy where consumers buy all goods from an online store that allows trading irms to sell goods and consumers to sell secondhand goods. All sellers pay 30% of their sales to the store as hosting fees, of which 5% goes to technicians as wages and another 5% goes to a logistics irm for delivery of the goods to consumers. In a given year, Trading Firm A’s sales revenue is $1 million, and Trading Firm B, which sells secondhand goods, receives sales revenue of $0.5 million.

Trading Firm A does not employ any workers to produce or market the goods but pays 40% of its sales revenue to import the goods. Trading Firm B’s revenue for the sale of second-hand goods covers the hosting fees and the cost of goods originally purchased in the past. The logistics irm pays 80%

of the sales revenues to truck drivers as wages. Calculate the economy’s GDP for the year using

(a) the product approach,

(b) the expenditure approach, and

(c) the income approach.