Suppose a group of British investors finances the construction of a plant to manufacture bicycles in Houston, Texas. The construction of the plant will U. S. GDP. Suppose the plant generates $250,000 in corporate profits this year. Will these profits contribute to GDP? Why or why not?"

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11 September, 04:36

Suppose a group of British investors finances the construction of a plant to manufacture bicycles in Houston, Texas. The construction of the plant will U. S. GDP. Suppose the plant generates $250,000 in corporate profits this year. Will these profits contribute to GDP? Why or why not?"

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Damon Zavala · Answer 1

Yes, through buying all labor and plant content, engineering services etc., this will relate to GDP. Mind the meaning of yourself. The final market price of all finished products and services.

As well as yes, the gain would have been driven into GDP because it was part of the final volume of skateboards on the market.

And whenever the company spends it in new manufacturing, and the shareholders receiving a portion of the gain in dividend payments in goods and services find their way back to GDP.