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Suppose that Apple pays foreigners $200 for parts and assembly of an iPhone, and sells the iPhone to a US consumer for $600. How much does this iPhone add to US GDP?

a.$0
b.$200
c.$400
d.$600

1 Answer

4 votes

Final answer:

The dollar value of GDP can be calculated by adding up the components of GDP: consumption spending (C), investment (I), government purchases (G), and net exports (X - M). In this case, the dollar value of GDP is $3,030 billion.

Step-by-step explanation:

The dollar value of GDP can be calculated by adding up the components of GDP: consumption spending (C), investment (I), government purchases (G), and net exports (X - M).



In this case, the consumption spending is $2,000 billion, investment is $50 billion, government purchases are $1,000 billion, and net exports are the difference between export sales ($20 billion) and imports ($40 billion).



So, the dollar value of GDP is $2,000 billion + $50 billion + $1,000 billion + ($20 billion - $40 billion) = $3,030 billion.

User John Hodge
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