The table below shows the price of inputs and the price of outputs at each step in the production process of making a shirt. Assumethat each of these steps takes place within the country.InputsValue of outputCotton Farmer$0$1.55Fabric Maker$1.55Sewing and Printing$3.65$3.65$18.20Instructions: Round your answers to two decimal places.a. Using the standard expenditure method, the total contribution of this shirt to GDP is:b. If we use a value-added method (i.e., summing the value added by producers at each step of the production process, equal to thevalue of output minus the price of inputs), the contribution of this shirt to GDP is:c. If we mistakenly added the price of both intermediate inputs and final outputs without adjusting for value added, we would find thatthis shirt contributes:to GDPThis overestimates the true contribution by: $

Detailed explanation: Since, the final t-shirt is sold for $18.20 to the consumer, as per the…

Answered: The table below shows the price of…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter4: Labor And Financial Markets

Section: Chapter Questions

Problem 31P: Table 4.6 shows the amount of savings and barrowing in a market for loans lo purchase homes,...

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