Question

An economy produces only 1,000,000 computers valued at $2,000 each. Of these 200,000 are sold to consumers, 300,000 are sold to businesses, 300,000 are sold to the government, and 100,000 are sold abroad. No computers are imported. The unsold computers at the end of the year are held in inventory by the computer manufacturers. What is the value of GDP?

A. $0.9 billion.
B. $1.0 billion.
C. $1.8 billion.
D. $2.0 billion.

Answer 1

The correct answer is option D.

Step-by-step explanation:

An economy produces only 1,000,000 computers valued at $2,000 each.

200,000 are sold to consumers, 300,000 are sold to businesses, 300,000 are sold to the government, and 100,000 are sold abroad.

The GDP of a nation includes the value of final goods and services produced within the boundaries of the nation in a year. A total of 1,000,000 computers valued at $2,000 are produced in the economy.

The GDP will be

=
`1,000,000\ *\ \$ 2,000`

= 2,000,000,000 or 2 billion