Chapter 1. Chapter 2 – Problem 6

Question 1

Work It Out
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You must read each slide, and complete any questions on the slide, in sequence.

Question

Larry is the sole owner of Larry’s Moving Company, Incorporated (LMC). In one year, LMC collects $2,000,000 from customers to help them move. LMC’s equipment depreciates in value by $200,000. LMC pays $1,400,000 to its workers, who pay $500,000 in taxes on this income. LMC pays $175,000 in corporate income taxes and pays Larry a dividend of 100,000. Larry pays taxes of $50,000 on this dividend income. LMC retains $125,000 of earnings in the business to finance future expansion. How much does this economic activity contribute to each of the following?

GDP = $ JviFf1xHw53YppKZpcVSSwSo+r6OVfOB

Review text pages 21-22, and 29-32 for a discussion of the various measures of economic activity provided in the national income accounts.
1:00

Question 2

Question

Larry is the sole owner of Larry’s Moving Company, Incorporated (LMC). In one year, LMC collects $2,000,000 from customers to help them move. LMC’s equipment depreciates in value by $200,000. LMC pays $1,400,000 to its workers, who pay $500,000 in taxes on this income. LMC pays $175,000 in corporate income taxes and pays Larry a dividend of 100,000. Larry pays taxes of $50,000 on this dividend income. LMC retains $125,000 of earnings in the business to finance future expansion. How much does this economic activity contribute to each of the following?

NNP = $ 1C3eFsApNTFX6BRer8FfD4h2gtafntpw

Review text pages 21-22, and 29-32 for a discussion of the various measures of economic activity provided in the national income accounts.
1:53

Question 3

Question

Larry is the sole owner of Larry’s Moving Company, Incorporated (LMC). In one year, LMC collects $2,000,000 from customers to help them move. LMC’s equipment depreciates in value by $200,000. LMC pays $1,400,000 to its workers, who pay $500,000 in taxes on this income. LMC pays $175,000 in corporate income taxes and pays Larry a dividend of 100,000. Larry pays taxes of $50,000 on this dividend income. LMC retains $125,000 of earnings in the business to finance future expansion. How much does this economic activity contribute to each of the following?

National Income = $1C3eFsApNTFX6BRer8FfD4h2gtafntpw

Review text pages 21-22, and 29-32 for a discussion of the various measures of economic activity provided in the national income accounts.
1:23

Question 4

Question

Larry is the sole owner of Larry’s Moving Company, Incorporated (LMC). In one year, LMC collects $2,000,000 from customers to help them move. LMC’s equipment depreciates in value by $200,000. LMC pays $1,400,000 to its workers, who pay $500,000 in taxes on this income. LMC pays $175,000 in corporate income taxes and pays Larry a dividend of 100,000. Larry pays taxes of $50,000 on this dividend income. LMC retains $125,000 of earnings in the business to finance future expansion. How much does this economic activity contribute to each of the following?

Compensation of Employees = $ XVGdjH0hA7TXrpdT4Zebr5hwe4kUyuYM

Proprietors’ Income = 78YzBHhvBzA50GXZ

Corporate Profits = $ 0wa5jkvvS1g5EzOxA+wS4SZ5s0s=

Review text pages 21-22, and 29-32 for a discussion of the various measures of economic activity provided in the national income accounts.
0:48

Question 5

Question

Larry is the sole owner of Larry’s Moving Company, Incorporated (LMC). In one year, LMC collects $2,000,000 from customers to help them move. LMC’s equipment depreciates in value by $200,000. LMC pays $1,400,000 to its workers, who pay $500,000 in taxes on this income. LMC pays $175,000 in corporate income taxes and pays Larry a dividend of 100,000. Larry pays taxes of $50,000 on this dividend income. LMC retains $125,000 of earnings in the business to finance future expansion. How much does this economic activity contribute to each of the following?

Personal Income = $LER48uky2YFr9gp5H09nxIL07lNZKJJz

Disposable Personal Income = $WbQNtbgK0WDW1/CXiUrVEPf5nP4=

Review text pages 21-22, and 29-32 for a discussion of the various measures of economic activity provided in the national income accounts.
1:23