Farmer John produces oranges.He sells half of his inventory to people at his roadside stand for $20,000 and sells the other half to Tropicali for $15,000.Tropicali uses the oranges to make orange juice,which it sells to consumers for $25,000.The impact of these transactions on gross domestic product (GDP)is

Question

Quizplus · Accepted Answer

The value added at each stage of production is included in GDP. Farmer John's value added is $20,000, Tropicali's value added is $10,000, and the consumers' value added is $15,000. So the total impact on GDP is $20,000 + $10,000 + $15,000 = $45,000.

Farmer John Produces Oranges