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the expenditure and value-added approaches to calculating gdp arrive at the same final number, but they reach that number in different ways. to illustrate, consider the possible effects of the following set of transactions on gdp:
1. eric pays awesome foods market $1,000 to cater his daughter's engagement party. he's attracted by awesome foods market's guarantee that he'll be happy with the catering or get his money back.
2. awesome foods market pays joann's catering $900 to cater the party.
3. joann's catering buys plasticware worth $150 from kostko.
compute the contribution to gdp of this set of transactions, using the expenditure approach, i. e., by assuming expenditures of buyers of final goods and services. assume that kostko receives the plasticware at no charge and that other costs are zero.
which of the following would be included in the expenditure method of calculating gdp? check all that apply.
eric spends $1,000.
joann's catering spends $150.
awesome foods market spends $900.
the total contribution of these transactions to gdp, as measured by the expenditure approach, is .
now use the following table to compute the contribution of these transactions to gdp by summing the values added at each stage of production.
stage of production sale value cost of intermediate goods resource cost-income
kostko $150 — $
joann's catering $900 $ $
awesome foods market $1,000 $ $
the contribution to gdp that you found using the expenditure approach corresponds to the sum of the each