Question
using the income method, the production method and the expenditure method: Assume a 16 year old named William Gates writes a computer program in his
using the income method, the production method and the expenditure method:
Assume a 16 year old named William Gates writes a computer program in his garage. The software is stored in his hardware. What is his contribution to GDP? Now, instead assume William Gates incorporates a company called Microsoft, with himself as the only employee. Any production cost is attributed to his salary. He still works in his garage. He creates the same computer program. Suppose he values the computer program for $20,000. What is the contribution to GDP? What is the money that Bill Gates gets in his bank account by the end of the year and how much is registered as salaries?
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