A US-Owned Automobile Factory Uses $50 Million Worth of Materials Produced

question 214

Essay

A U.S.-owned automobile factory uses $50 million worth of materials produced in the U.S. and $10 million worth of material purchased from foreign countries to produce $100 million of automobiles. $70 million worth of these automobiles are purchased by U.S. consumers, $25 million are sold in foreign countries, and $5 million are added to inventory. How much of this production is included in U.S. GDP? By how much do these transactions alone affect U.S. net exports?

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Definitions:

Business and Government

The interaction and relationship between commercial enterprises and governmental bodies, influencing regulations, policies, and economic conditions.

Economic Sense

Activities or decisions that are justifiable in terms of profitability, efficiency, or other measures of economic benefit.

Packing Slip

A document included with a shipment that lists the contents and sometimes the order details, used for verifying receipt of goods.

Receiving Department

The area in a business where goods and materials are received from suppliers and checked for quality and quantity.