Emily is a writer.She buys pens and paper for $20 and writes a 500-page novel that she sells to a publishing company for $500,000.If the publisher prints 1 million copies that sell for $25 each, what is the contribution to GDP of Emily's novel?

Question

Quizplus · Accepted Answer

The contribution to GDP includes only final goods and services, which in this case is the publishing of the novel. The value of the novel sold by the publisher is $25 x 1,000,000 = $25,000,000. Therefore, the contribution to GDP is $25 million. The cost of the pens and paper used by Emily is already counted in the cost of the novel sold by the publisher, so it is not included separately in the GDP calculation.

Emily Is a Writer