Personal consumption Consumer goods and services Firms Households Factors of production (labor, capital, and natural resources) Factor incomes (wages, interest, profit, and rent) The above figure shows an economy with only one kind of good, consumption goods. Now assume that this economy has investment because business firms produce more jeans than they can sell and they keep those jeans in inventory. Would the pink line at the top still be an accurate measure of nominal GDP?QUESTION: 22. Table: Final Value and Value Added Good Produced by Purchased by Price Value Added Logs Logger Sawmill $12,000 $12,000 Lumber Sawmill Construction firm $25,000 $13,000 House Construction firm Household $125,000 $100,000 11]] ' H H Final Value ' $125,000 ' Sum of Values Added $125,000 The Value-Added Tax has been commonplace throughout the world, and will probably be adopted by the United States within your lifetime. It affects the economy the same way thata sales tax does, but, because it is collected at each stage of production, it doesn't involve as much cheating as a sales tax. Each business pays on what it sells after deducting what it buys from other businesses. There is little cheating, since businesses report how much they buy from other businesses, which keeps their suppliers honest. Table 6.1 shows the prices paid in the contstruction of the house. How much value is added by the sawmill? If the value-added tax were 10%, how much tax would the sawmill pay? Personal consumption Consumer goods and services Firms Households Factors of production labor, capital, and natural resources) Factor incomes QUESTION: 23. (wages, interest, profit, and rent) The above figure shows an economy with only one kind of good, consumption goods. (This economy doesn't have investment goods, government purchases, or foreign trade.) Which line shows the total income received by households?Personal consumption Consumer goods and services Firms Households Factors of production (labor, capital, and natural resources) Factor incomes QUESTION: 24. (wages, interest, profit, and rent) The above figure shows an economy with only one kind of good, consumption goods. (This economy doesn't have investment goods, government purchases, or foreign trade.) Which line shows the flow of factors of production (including labor) from households to firms