Suppose we have the following information about a car manufacturer: car sales $1000M,steal purchases $600M,wages $300M,interest on business loans $50M,and profits $50M. What is its contribution to GDP using the product approach?
A) $1000M
B) $600M
C) $400M
D) $350M

Question

Quizplus · Accepted Answer

GDP using the product approach is calculated as the sum of value added by all industries in the economy. Value added is calculated as the difference between the value of output and the value of intermediate inputs. In this case, the value of output is $1000M, and the value of intermediate inputs is $600M. Therefore, the value added is $400M.

Suppose We Have the Following Information About a Car Manufacturer