There are three firms in an economy: A, B, and C. Firm A buys $400 worth of goods from firm B and $240 worth of goods from firm C, and produces 220 units of output, which it sells at $7 per unit. Firm B buys $130 worth of goods from firm A and $170 worth of goods from firm C, and produces 450 units of output, which it sells at $4 per unit. Firm C buys $200 worth of goods from firm A and $100 worth of goods from firm B. It produces output worth $1,200. All other products are sold to consumers.
Instructions: Round your answers to the nearest whole number.
a. Calculate GDP.
$.
b. If a value-added tax (a tax on the total value added by each firm) of 14 percent is introduced, how much revenue will the government get?
$.
c. How much would government get if it introduced an income tax of 14 percent?
$.
d. How much would government get if it introduced a sales tax of 14 percent on final output?
$