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Firm X : sells goods to firm Y to produce its service of value of 200, sells good to final consumers at 500, pay wages
Firm X : sells goods to firm Y to produce its service of value of 200, sells good to final consumers at 500, pay wages of 200
Firm Y : sells goods to firm X to produce its service of value of 150, sells good to final consumers at 200, it sells abroad for 100, pay wages of 150
a) Estimate GDP using production and income methods. b) Assume that Firm X decides to transfer its production abroad. Would the GDP of the country under analysis increase, decrease or remain the same and why ? c) Assume that Firm Y decides to continue its production in the country but that foreign multinatinal corporation decides to buy it. Would the GDP of the country under analysis increase, decrease or remain the same and why ?
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