Question

Which of the following does NOT add to U.S. GDP? Air France buys a plane from Boeing, the U.S. aircraft manufacturer. General Motors builds a new auto factory in North Carolina. The city of New York pays a salary to a policeman. The federal government sends a Social Security check to your grandmother

Answer 1

Answer: The federal government sends a social security check to your grandmother.

Explanation: An economy is made up of many agents (companies, individuals, government), most of which produce goods or services. Each good or service has a certain value. Assume an economy made up of two companies, one of which produces corn and the others uses corn to make oil. The first company pays $20 to its workers and sells its production to the company 2 to $100. Company 2 pays $50 to its workers and sells its production for $200.