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1. There are two firms, Maruti and Suzuki. Maruti is an Indian firm which produces cars worth 200 million dollars and operates only in India.
1. There are two firms, Maruti and Suzuki. Maruti is an Indian firm which produces cars worth 200 million dollars and operates only in India. Suzuki is a Japanese firm which has plants both in India and Japan. The Indian leg of Suzuki produces only engines worth 50 million dollars and sells the whole consignment to Maruti. They do not use any intermediate good for producing engines. The Japanese leg of Suzuki manufactures cars in Japan worth 300 million dollars, sells cars worth of 240 million dollars in the Japanese market and exports the remaining to India. They also do not use any intermediate good to produce cars. Maruti sells 120 million dollar worth of cars in the Indian market and exports the rest to Japan. Labor is immobile across borders so that Maruti as well as the Indian leg of Suzuki employ only Indian workers while the Japanese leg of Suzuki employs only Japanese workers. Maruti pays 10 million dollars as wages to its employees. Suzuki's Indian leg pays 5 million dollars as wages and the Japanese leg pays 20 million dollars as wages. (a) Find the GDP of India using the product approach, the expenditure approach and the income approach. (b) Find the GDP of Japan using the product approach, the expenditure approach and the income approach. (c) Now, suppose that all workers in India are Japanese nationals and all workers in Japan are Indian nationals. How will this impact the above calculations
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