A furniture maker used to buy its wood,but has now bought the lumber company. How does this impact GDP?
A) It reduces it.
B) It does not change.
C) It increases it.
D) We cannot tell.

Question

Quizplus · Accepted Answer

When the furniture maker buys the lumber company, the transaction is considered an internal transfer and does not directly affect GDP, as GDP measures the value of final goods and services produced in an economy.

A Furniture Maker Used to Buy Its Wood,but Has Now