Michigan Tea Company sold $15 million worth of tea it produced. In producing this tea it purchased $5 million dollars worth of ingredients from foreign countries and paid workers who reside in Canada but commute to the U.S. $1 million. How much did these transactions add to U.S. GDP?

Question

Quizplus · Accepted Answer

U.S. GDP includes the value of goods and services produced within the U.S. The $15 million worth of tea is included in GDP, but we must subtract the $5 million spent on foreign ingredients and the $1 million paid to Canadian workers, resulting in a net addition of $9 million to U.S. GDP.

Michigan Tea Company Sold $15 Million Worth of Tea It