Question

If the Citrus Growers Association grows $1 million worth of oranges, sells $500,000 worth of oranges to consumers, uses the rest to make orange juice that is sold to consumers for $3 million, Citrus Grower's contribution to GDP is:
a. 500,000
b. 1,000,000
c. 3,500,000
d. 4,000,000

Answer 1

Answer:

The answer is $3 500 000

Explanation:

The above transactions affect  the Consumption component in GDP.

Citrus Grower's contribution to GDP = $3 million + $500,000= $3 500 000

$1 million worth of oranges grown was not included because the amount was the estimated value of oranges and not actual value of oranges consumed.