1. Suppose an economy has only two sectors, Goods and Ser- vices. Each year, Goods sells 80% of its output to Services and keeps the rest, while Services sells 70% of its output to Goods and retains the rest. Find equilibrium prices for the annual outputs of the Goods and Services sectors that make each sector's income match its expenditures.

Gross domestic product (GDP) is the standard computation of the value added created through the production of products and services in a country during some period. As such, it also computes the income earned from that production or the total amount spent on final products and services (minus imports).