Question

Quality Motors is a Japanese-owned company that produces automobiles; all of its automobiles are produced in American plants. In 2007, Quality Motors produced $20 million worth of automobiles, with $12 million in sales to Americans, $6 million in sales to Canadians, and $2 million worth of automobiles added to Quality Motors’ inventory. The transactions just described contribute how much to U.S. GDP for 2007

Answer 1

Answer:

$20 million

Explanation:

The gross domestic product is the total production of final and legal goods and services produced within  country during a specific period (usually a year).

All the automobiles produced by Quality Motors were manufactured in the US during 2007, so they should all be accounted for in the GDP of 2007.

GDP = consumption + investment + government + exports - imports

$12 million fall under consumption, $6 million under exports and $2 million under investments