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In 2007, Corny Company grows and sells $2 million worth of corn to Tasty Cereal Company, which makes corn flakes. Tasty Cereal Company produces $6 million worth of corn flakes in 2007, with sales to households during the year of $4.5 million. The unsold $1.5 million worth of corn flakes remains in Tasty Cereal Company’s inventory at the end of 2007. The transactions just described contribute how much to GDP for 2007?

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segehood

Answer:

$6 million

Explanation:

Recall that, GDP which is the gross domestic product, is the sum of all market price or final goods and services produced within a country's geographical boundary during a period of time, say one year.

Therefore,

From the above question

GDP = $6 million from the worth of corn flakes Tasty cereals produces.

NOTE that, Corny company production and sales is not counted because it is NOT THE FINAL GOODS.

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