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A. general electric uses $10 million worth of glass, steel, and plastic to produce dishwashers. wages and salaries in the dishwasher division are $40 million; the division's only other expense is $15 million in interest that it pays on its bonds. the division's revenue for the year is $75 million. (hint: you can use either of our two methods to calculate this, one is easy, the other is more difficult)

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Answer:

Expenditure Method, GDP is the value of the final good sold in the market. So, GDP will rise by $75 million.

Using the Factor payments approach,

[tex]GE’s profit = Revenue - Cost   =$75 million – ($10 + $40 + $15)   = $10 million.[/tex]

Wages and salaries and interest paid by [tex]GE = $40 + $15 = $55.[/tex]

Adding GE's profit and its factor payments we get,

[tex]= $10 + $10 + $55   = $75 million[/tex]

Thus, GDP by both the methods is $75 million.

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