Question

if a firm bakes cookies anif a firm bakes cookies and sells them for $1,000 while spending $200 on sugar, $150 on chocolate, $50 on other supplies, $300 on wages and $400 on rent, what is its value added? $300 $0 $700 $200 $400d sells them for

Answer 1

If a company makes cookies and sells them for $1,000 while spending $1,000 on rent, $300 on employees' salaries, $150 on chocolate, $50 on miscellaneous supplies, and $200 on sugar. $2100 is value added.

What is value added on cookies firm ?

Value Added is calculated as Market Value (Price) - Value of Intermediate Goods. It is the markup (increase) a company adds to a good or service.

GDP is determined by combining consumption, investment, government, and net export spending; Y = C + I + G + NX.

Y = $1,000 + $200+ $150 + $50 + $300 + $400 = $2100

In contrast to real GDP, which values production at constant prices, nominal GDP evaluates production at current prices.Transfer payments include things like welfare, financial assistance, social security, and government subsidies for particular industries.

In order to determine real GDP from nominal GDP, you must: Multiply a pricing index by the nominal GDP. Since it is the most thorough indicator of changes in the overall level of prices in a given economy, the GDP deflator is typically utilized for that purpose.

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