Question

In a simple economy with only businesses and​ households, suppose that the sum total of all the goods and services produced during the relevant periodlong dashpairs of​ shoes, candy​ bars, digital​ devices, etc. all summed togetherlong dashis 460 trillion units. The total dollar value of this flow of output is ​$45 trillion. The total amount of factors of productionlong dash​labor, ​land, capital,​ entrepreneurship, all summed togetherlong dashis 0.7 billion units. What is the flow of incomelong dashthat ​is, the sum of​ wages, rents,​ interest, and​ profits?

The flow of incomelong dashthe sum of​ wages, rents, interest and profitslong dashis

Answer 1

$45 trillion is the answer.

Step-by-step explanation:

For this question, it is necessary to point out that profit functions as a leftover from cumulative business acquisitions; first, it is necessary that all the other expenses are paid. Also, total income and final output have to match. So, if one person or group of people make an expense, another person or group will earn money or get a profit.

Answer 2

$45 trillion.

Explain:

The balance between total revenue and the dollar amount of total output arises from the role performed by profit. Profit works as a leftover from cumulative business acquisitions after all other expenses such as long dash wages or dash labor, rents, interests have to be paid. If the dollar value of total output is $500, and the total expenses for producing the output is $450, there is an economic profit of $50. Hence, total income must meet the value of the total output. Therefore, I can say that if one group of people spend, another combination of individuals will realize a profit.

Step-by-step explanation: