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Answer :
Answer: B - $20,000
Explanation:
The Gross Domestic Product (GDP) is the value of all final goods and services produced in an economy within a particular time frame which is usually a year.
It's only final goods and services that are added in the calculation of GDP.
The parts used in the production of the car are intermediate goods.
Intermediate goods are goods that are used for the production of the final good.
Therefore, it is only the cost of the car - $20,000 that is added in the calculation of GDP as the contribution of the car manufacturer.
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Final answer:
Each car sold contributes $20,000 to the Gross Domestic Product (GDP), which is the final sale price of the car. Individual costs of the parts are not subtracted in GDP calculations for final goods.
Explanation:
The question asks us to calculate the contribution to Gross Domestic Product (GDP) made by selling an automobile for $20,000, accounting for the costs of various parts. GDP represents the total market value of all final goods and services produced within a country during a specific period. Since we only consider the final selling price of the car in the calculation of GDP, the costs of individual parts do not subtract from this value. Thus, the contribution of each car sold to GDP is simply the final sale price. The correct answer to the question is therefore $20,000, which is the price that the car is sold for. This is how much each car contributes to the nation's GDP, regardless of the cost of its components like windshields, tires, and CD players.
