Question

michigan tea company sold $15 million worth of tea it produced. in producing this tea it purchased $5 million dollars worth of ingredients from foreign countries and paid workers who reside in canada but commute to the u.s. $1 million. how much did these transactions add to u.s. gdp?$21 million$15million$10million$9 million

Answer 1

The transactions involving the tea produced by the Michigan Tea Company would add $15 million to U.S. GDP.

Step-by-step explanation:

In the given scenario, the tea company sold $15 million worth of tea, purchased $5 million worth of ingredients from foreign countries, and paid workers $1 million who reside in Canada but commute to the U.S. In order to calculate the contribution to U.S. GDP, we need to consider the production value added by each transaction. The final output value of the tea sold will be counted as part of the GDP, while the value of ingredients and the payment to workers will be considered as intermediate inputs and not included in the GDP.

Therefore, the transactions involving the tea produced by the Michigan Tea Company would add $15 million to U.S. GDP.