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 the value of GDP?
A) $5 million.
B) $40 million.
C) $45 million.
D) $50 million.
E) $95 million.

Question

Quizplus · Accepted Answer

GDP is calculated as the total value of all final 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