A sheep ranch produces $30 worth of wool. A suit manufacturer produces $60 worth of suits. A retail outlet sells a suit to a customer for $180. The change in GDP would be
A) $30.
B) $180.
C) $270.
D) zero because wool suits are worthless.

Question

Quizplus · Accepted Answer

The change in GDP is $180, which is the final sale price of the suit to the customer. GDP measures the market value of all final goods and services produced within a country, and in this case, the final sale price reflects the value added at each stage of production.

A Sheep Ranch Produces $30 Worth of Wool