Fine Edge manufactures lawn mowers.In 2014 it had $2 million worth of lawn mowers in inventory.In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory.How much did the lawn mowers produced by Fine Edge add to GDP in 2015?

Question

Quizplus · Accepted Answer

The GDP contribution is calculated by the value of goods sold plus the change in inventory. Fine Edge sold $10 million worth of lawn mowers and reduced its inventory by $1 million (from $2 million to $1 million), indicating $9 million worth of production contributed to GDP in 2015.

Fine Edge Manufactures Lawn Mowers