When a Refrigerator Worth $1,000 Is Produced and Sold,its Contribution

question 79

Multiple Choice

When a refrigerator worth $1,000 is produced and sold,its contribution to the GDP is measured on the expenditure side by its sale price and on the income side by

• A)the wages earned by the workers in the firm that produced it
• B)the wages earned by the workers and the profits earned by the owners of the firm that produced it
• C)wages,interest,and rent paid by the firm's owners to those who contributed to making the refrigerator
• D)wages,interest,and rent paid by the firm's owners to those who contributed to making the refrigerator,less taxes
• E)wages,interest,and rent paid by the firm's owners,plus the profit they kept for themselves

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Definitions:

Maquiladoras

Factories located in Mexico, typically near the US border, that import materials and equipment on a duty-free and tariff-free basis for assembly or manufacturing and then export the assembled product.

Foreign Trade Zones

Designated areas where goods can be imported, stored, handled, manufactured, or reconfigured without being subject to customs duty.

Labor Costs

The total expenditures related to compensating employees, including wages, benefits, and taxes.

Customs Clearance

The process of obtaining permission to import or export goods from one country to another, including the payment of duties and taxes.