Final answer:
The value of cars produced by a Japanese company in the U.S. contributes to the U.S. GDP rather than GNP. These manufacturers enhance competition, which leads to economic growth and improves the quality and variety of cars in the market. Their U.S. operations also generate employment and contribute to the local economy.
Step-by-step explanation:
Impact of Japanese Automakers on the U.S. Economy
When a Japanese company manufactures cars in the United States, it contributes to the United States' Gross National Product (GNP). GNP measures the economic output produced by the nationals of a country irrespective of where the production takes place. Therefore, the value of the cars produced by a Japanese company within the United States will not directly increase the U.S. GNP, because GNP accounts for output generated by domestic entities, irrespective of geography. Instead, this activity contributes to the United States' Gross Domestic Product (GDP), which measures economic activity within the borders of the country. The car production by the Japanese company will increase U.S. GDP but not GNP.
However, the presence of Japanese car manufacturers like Toyota, Honda, and Nissan in the U.S. market has led to increased competition and consumer choice, which has spurred economic growth and improvement in the quality of American cars. Competition from Japanese automakers has historically forced U.S. carmakers to innovate and respond more effectively to consumer demands. Additionally, production by these Japanese companies in the U.S. generates employment and builds infrastructure, thus contributing to the overall U.S. economy, even though it might be counted differently in GNP statistics.
Furthermore, global car manufacturers establishing production facilities in the U.S., contribute to a diversified and more resilient local economy. This international trade scenario allows economies of scale to lower average production costs for these automakers, providing benefits to the consumers through competitive prices and more options. The economic activity generated by these companies, including jobs and local investments, has integral benefits for the U.S. economy.