11. Gross Domestic Product (GDP) and Consumer Price Index (CPI)
Value Added Method for Measuring GDP
11. Gross Domestic Product (GDP) and Consumer Price Index (CPI)
Value Added Method for Measuring GDP - Online Tutor, Practice Problems & Exam Prep
1
Problem
ProblemA cotton farmer produces raw cotton, which it can sell to a processor at a price of $2. The processor weaves the cotton into fabric and sells it for $3. A clothing company purchases the fabric and creates a crappy t-shirt, which it can sell for $7. Urban Outfitters buys crappy t-shirts and resells them for $45. What is the value added by the clothing company?
A
$3
B
$4
C
$7
D
$38