Suppose a jar of De Lux popcorn that is ultimately sold to a customer at Friendl

Question

Suppose a jar of De Lux popcorn that is ultimately sold to a customer at Friendly Groceries is produced by the following production process: Name of Company; Revenues; Cost of Purchased Inputs - respectively: Fulton Family Farm; $2.00; $0 De Lux Popcorn Co.; $5.00; $2.00 Friendly Groceries; $6.50; $5.00 Suppose the corn was grown on the farm and sold in 2000 while the jar of popcorn was produced by the De Lux Popcorn Co. in the year 2001. The jar of popcorn was sold to Friendly Groceries, which puts the jar on its shelves for purchase at $6.50 all in 2002, but the jar is not sold to a customer until the year 2003. What is the contribution of these transactions to GDP in the years 2000 and 2001 respectively? $0.00, $0.00 $3.00, $3.50 $2.00, $5.00

Explanation / Answer

GDP only add the final goods and not intermediate goods in order to avoid double counting so for 2001 it will be $2 and for 2001 it will be $5

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