Question

A steel company sells some steel to a bicycle company for $100. The bicycle company uses the steel to produce a bicycle, which it sells for $200. Taken together, these two transactions contribute

Answer 1

Answer:

hi your question lacks the required options here is the complete question

A steel company sells some steel to a bicycle company for $100. The bicycle company uses the steel to produce a bicycle, which it sells for $200. Taken together, these two transactions contribute

$100 to GDP.

$200 to GDP.

between $200 and $300 to GDP.

$300 to GDP.

Answer: $200 to GDP

Explanation:

The GDP ( gross domestic product ) of a country is the monetary value of all the finished goods and services produced in a country within a specific period.from the question the finished good is the Bicycle produced by the bicycle company and sold at $200. hence the transactions involving the sale of steel to a bicycle company and the use of the steel by the company to produce a finished good ( bicycle) contributes $200 to the country's GDP . in simple words the GDP of a country measures the economic output of a country in its own local currency. the bicycle produced is a finished good and can be sold to a local buyer or an international buyer. the steel is not a pure raw material in its ranks but it not a finished good as well so we can't consider its sale as a sale of a finished good therefore we do not consider its sale as a contribution to the country's GDP

Answer 2

Answer:

$200 to (GDP)

Explanation:

GDP stands for Gross Domestic Product and it is the total measure of a country's total economic activity. It is monetary of all the goods and services produced within the country for particular period of time.

Therefore, the transactions between the steel company and bicycle company as contributed $200 because GDP is calculated by adding private investment, private consumption, Government investment, government, government spending and the likes together.