An economy which is having a silver mining company, a jewelry retailer, a jewelry manufacturer and households/workers. The mining company pays its workers C=400,000 to mine 150kg of silver. The silver is then sold to the jewelry manufacturer for C=500,000 who pays its workers C=450,000 to make silver necklaces, which are sold to a retailer for C=1,200,000. The retailer sells the necklaces to consumers, and after paying sales staff C=100,000 makes a profit of C=200,000.
1. What is the GDP of this economy by using the production of final goods approach?
2. Determine the value added at each stage? Determine GDP using the „value-added"approach.
3. Determine the wages and profits earned by each sector? Explain the GDP by using the income approach.