When a firm produces and sells a refrigerator worth $1,000,its contribution to the gross domestic product (GDP)on the income side is measured by:
A)the price paid by the consumer.
B)the investment made by the firm to manufacture the refrigerator.
C)the stock of inventories used by the firm to manufacture the refrigerator.
D)the cost of raw materials used by the firm to manufacture the refrigerator.
E)the sum of the wages,interest,and rent paid by the firm's owners and the profit of the firm.

Question

Quizplus · Accepted Answer

The contribution to GDP on the income side includes the sum of wages, interest, rent paid by the firm's owners, and profits of the firm. This is because GDP measures the total income generated within an economy, and the income generated by the production and sale of the refrigerator contributes to this total income. The other options are not relevant to measuring the income generated by the firm's production and sale of the refrigerator.

When a Firm Produces and Sells a Refrigerator Worth $1,000,its