[AmirS2]

In Economy C, the workers who've been paid by the govt can then purchase 5000 Retina Macbook Airs at $1k each, the govt receives sales tax, apple employees get paid and pay income tax, and apple employees then spend their remaining money buying more Macbook Airs (going by your simpification that the only asset produced is computers) ... net GDP is then some way over $10m and everybody has a computer and is employed either producing computers or digging ditches

I would suggest that hyper-simplified economies are probably not a good model for anything ...

[jvm]

> In Economy C, the workers who've been paid by the govt can then purchase 5000 Retina Macbook Airs at $1k each

You are assuming transaction costs of 0 for international trade. If transaction costs for international trade are zero, then yes, of course the PPP adjustment would be a non-op. In the real world that we live in, equivalent goods often have very different prices in different countries.

[AmirS2]

Well, in our hyper simplified economy, the macbook airs are produced domestically - it's the only thing produced in fact (apart from ditches I guess)!

[vidarh]

They are three separate economies. If they were not, then the GDP examples makes no sense.

[cmsmith]

Except that apple doesn't want to sell computers for C$, because all it can buy with them is ditches.