Question
Assume an economy with two firms. Firm A produces wheat, and firm B produces bread. In 2019, firm A produced 50 bushels of wheat, sold
Assume an economy with two firms. Firm A produces wheat, and firm B produces bread. In 2019, firm A produced 50 bushels of wheat, sold 25 bushels to firm B at $2 per bushel, and exported 25 bushels at $2 per bushel. Firm A paid $50 in wages to consumers. Firm B produced 50 loaves of bread and sold all of it to domestic consumers at $3 per loaf. Firm B paid consumers $40 in wages. In addition to the 50 loaves of bread that consumers bought from firm B, consumers imported and consumed 15 loaves of bread, and they paid $4 per loaf for this imported bread. Calculate the gross domestic product (GDP). What is the gross national product (GNP) of this economy?
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