1. Products that would be used in calculating GDP include:
a. Toys manufactured in China at a factory owned by a U.S. company
b. cars manufactured in Tennessee at a factory owned by a Japanese automobile company
c. plastic manufactured in Kentucky and sold to toy manufacturers around the world to make plastic toys
d. cotton cloth manufactured in India and sold to clothes makers in the United States
I think the answer is B, can someone tell me if this is right?
Thank you, for your feedback. I just read another part of my economic book and B is definitely the answer.
I agree with your answer of (B). However, (C) also counts because, although the plastic sold is a raw material and not a final product consumed here, it is an export. Exports count toward the GDP.
See http://www.investorwords.com/2153/GDP.html
The correct answer is actually all of the above. All the products mentioned in options a, b, c, and d would be included in the calculation of GDP (Gross Domestic Product).
a. Toys manufactured in China at a factory owned by a U.S. company: This would be counted as a product of the U.S. company and contribute to the GDP of the United States.
b. Cars manufactured in Tennessee at a factory owned by a Japanese automobile company: This would be counted as a product of the Tennessee factory and contribute to the GDP of the United States.
c. Plastic manufactured in Kentucky and sold to toy manufacturers around the world to make plastic toys: The production of plastic in Kentucky would be counted in the GDP of the United States since it is a domestically produced good.
d. Cotton cloth manufactured in India and sold to clothes makers in the United States: The cotton cloth imported from India and used by clothes makers in the United States would be included in the GDP of the United States as an imported good.
So, in summary, all of the options mentioned would be used in calculating the GDP.
To determine which products would be included in calculating GDP, we need to understand what GDP measures. GDP stands for Gross Domestic Product and represents the total value of goods and services produced within a country over a specific time period.
In this case, let's analyze each option:
a. Toys manufactured in China at a factory owned by a U.S. company:
This product would be included in GDP. Since the toys are manufactured in China, they contribute to China's GDP. However, as the factory is owned by a U.S. company, the income generated would be part of the U.S.'s GDP under the category of foreign direct investment earnings.
b. Cars manufactured in Tennessee at a factory owned by a Japanese automobile company:
Yes, this product would also be included in GDP. The cars are produced in Tennessee, contributing to the GDP of the United States.
c. Plastic manufactured in Kentucky and sold to toy manufacturers around the world to make plastic toys:
This product would be included in GDP. The plastic is produced in Kentucky, adding value to the U.S. GDP.
d. Cotton cloth manufactured in India and sold to clothes makers in the United States:
No, this product wouldn't be directly included in the U.S. GDP. The cotton cloth is manufactured in India, contributing to India's GDP. However, when the cloth is sold to clothes makers in the United States, it would be considered an import and included in the U.S.'s GDP under the category of imports.
So, while option B is indeed included in GDP, there are actually multiple options in this list that would be included as well.