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  1. #1
    Junior Member Alito's Avatar
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    Suppose that Chrysler decided to produce a car in the U.S., which is then...

    ...exported and purchased by a German? Suppose that Chrysler decided to produce a car in the U.S., which is then exported and purchased by a German household. What will be the effect of such activity on the U.S. GDP? The effect on Germany's GDP? What happens to America's GNP as a result of Chrysler's decision? Explain.

  2. #2
    Junior Member Anjaree's Avatar
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    It is a true story, but less German household will buy Chrysler cars,even when Mercedes Benz had controlled the company for awhile. But I can still answer your question that it will increase US GDP,but reduce the German GDP.Good ha.That is the GDP definition that it is a sum of vale of final goods produced in the country within a year. The imports are not produced in the country, but consumers have consumed them. So it must be subtracted from GDP.


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