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Firm X, a designer clothing company, buys $400 worth of silk from a silk trader and $30 worth of accessories from Firm Y. Firm X makes a dress and sells it to Macy's for $900. Macy sells the dress to a customer for $1200. How much did GDP increase because of these transactions?

Firm X, a designer clothing company, buys $400 worth of silk from a silk trader and $30 worth of accessories from Firm Y. Firm X makes a dress and sells it to Macy's for $900. Macy sells the dress to a customer for $1200. How much did GDP increase because of these transactions?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Firm X, a designer clothing company, buys $400 worth of silk from a silk trader and $30 worth of accessories from Firm Y. Firm X makes a dress and sells it to Macy's for $900. Macy sells the dress to a customer for $1200. How much did GDP increase because of these transactions?

 

Question 20 options:

 

A) 

 $1200
 

B) 

 $1330
 

C) 

 $2100
 

D) 

 $2530
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The chances of double counting is high in these type of activity.

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