The Bigdrill company drills for oil,which it sells for $200 million to the Bigoil company to be made into gas.The Bigoil company's gas is sold for a total of $600 million.What is the total contribution to the country's GDP from companies Bigdrill and Bigoil?
A)$200 million
B)$400 million
C)$600 million
D)$800 million

Question

Quizplus · Accepted Answer

The total contribution to the country's GDP is $600 million because GDP measures the final value of goods and services produced, which in this case is the value of the gas sold by Bigoil. The sale from Bigdrill to Bigoil is an intermediate step and not counted separately in GDP.

The Bigdrill Company Drills for Oil,which It Sells for $200