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The Data of Macroeconomics — Work It Out Question 1 Tina is the sole owner of Tina's Lawn Mowing, Incorporated (TLM)

Economics Sep 05, 2020

The Data of Macroeconomics — Work It Out Question 1 Tina is the sole owner of Tina's Lawn Mowing, Incorporated (TLM). In one year, TLM collects $2500000 from customers to mow their lawns. TLM's equipment depreciates in value by $312500. TLM pays $1500000 to its workers, who pay $345000 in taxes on this income. TLM pays $125000 in corporate income taxes and pays Tina a dividend.of $375000. Tina pays taxes of $150000 on this dividend income. TLM retains $187500 of earnings in the business to finance future expansion. How much does this economic activity contribute to each of the following? 
Round your answers to two places after the decimal where necessary. 
d. Compensation of employees = $ e. Proprietor's income = $ f. Corporate profits = $ 
 

Expert Solution

d.) Compensation of employees is $1500000.

 

e.) Proprietor's income is $0 because it comes under corporation.

 

f.) Corporate profit= Income tax+ Dividend+ Earnings

= 125000+ 375000+ 187500

= 687500

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