9) Suppose ACE Tire produces $4000 of tires in 2011 selling four of these tires
ID: 1187095 • Letter: 9
Question
9) Suppose ACE Tire produces $4000 of tires in 2011 selling four of these tires for $1000 to Best Car. If Best Car pays $600 for a GPS system produced in 2010, pays $400 for a car CD player produced in 2011, and then sells the car made with all of these purchased parts from both years for $25,000 in 2011, then the contribution of all of these activities to 2011 GDP is _____ and the value added in 2011 by Best Car is _____.
A) $27,400; $25,000
B) $25,400; $21,000
C) $29,400; $25,000
D) $29,400; $23,000
E) $27,400; $23,000
The answer is E but I don't know how the GDP value is obtained, if someone could explain it to me it would be greatly appreciated
Explanation / Answer
D) $29,400; $23,000
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