Acme US Revenue: $15000 Payment to Workers: $10500 Purchased Inputs: Engines $30

Question

Acme US
Revenue: $15000
Payment to Workers: $10500
Purchased Inputs:
Engines $3000
Elecricity $500

US HYRDOELECTRIC
Revenue: $500
Payment to Workers: ?
Purchased Inputs: $0

Acme Mexico
Revenue: $3000
Payments to Workers: $2200
Purchased Inputs: $0

When Acme Worldwide uses a price of $3,500 to transfer an engine from Acme Mexico to Acme U.S., each car produced adds _______ to GDP in the United States and adds ________ to the income citizens of the United States receive from abroad. The sum of these two terms is the GNP in the United States from the production of a car.




A. $9,000, $700

B. $12,000, $800

C. $14,500, $500

D. $11,500, $1,300

Explanation / Answer

D (15,000-3,500=11,500) in the U.S. and (3,500-2200=1,300) from abroad.

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