An economy produces 500,000 tables valued at $100 each. Households purchase 100,000 tables, of which 50,000 are imported. Businesses purchase 200,000 domestically produced tables, the government purchases 100,000 domestically produced tables, and 50,000 domestically produced tables are sold abroad. The unsold tables at the end of the year are held in inventory by the table manufacturers. What is value of GDP?

Question

Quizplus · Accepted Answer

GDP is calculated as the total value of goods and services produced within a country. Here, 500,000 tables are produced domestically, each valued at $100, resulting in a GDP of $50 million (500,000 tables x $100 each).

An Economy Produces 500,000 Tables Valued at $100 Each