macroeconomics question

Question

Consider an economy with three companies A, B, C. Company A produces cardboard, (10 points) which is used by Company B to produce boards and cards, which is used by Company C to produce board games. Company A’s revenues (from sales to Company B) amount to 100 TL, and its expenses on labor amount to 30 TL. Company B’s revenues amount to 250 TL, while its expenses on labor amount to 80 TL. Company C’s revenues amount to 400 TL, while its expenses on labor amount to 90 TL.

(a) Show three different ways to compute this economy’s GDP.

(b) Now introduce a government into this economy and also a fourth company, call it D, which produces exclusively for the government. The government buys goods from D, and pays for them by taxing the profits of Companies A, B and C at the rate of 25%. The government also chooses to run a budget deficit equal to 10% of GDP. Compute this new economy’s GDP and company D’s revenues. (Assume that company D produces at zero cost)

Answer 1

In order to work with any "bookkeeping software" you need to understand the basics of accounting/bookkeeping.

There are only 5 major categories of accounts:

Assets

Liabilities

Income aka Revenue

Capital aka Equity

Expenses

Please note how the first letter of each category spells ALICE.

These categories can have multiple sub-accounts, such as

Revenue:

Commercial Revenue

Residential Revenue

Government Revenue

Non-Taxable Revenue

And the same thing can be done for expenses.