Question
Q5. Suppose again there are only three companies in an economy. Company A grows crops and extracts minerals from its lands with no inputs from
Q5. Suppose again there are only three companies in an economy. Company A grows crops and extracts minerals from its lands with no inputs from other companies. Its sales are $100m per year, half of which goes to consumers and half to companies B and C in equal amounts. Company B buys inputs from A and sells its entire output of $200m to company C. Company C buys inputs from A and B and sells $450 output directly to consumers (through 20% of this overseas). What is the gross valued added at basic prices? If there is only one indirect tax, value added tax, levied at 10%, what is the value of GDP at market prices?
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