An American car company sells 200 vehicles to Germany for a total of $600,000, While the United States imports 100 cars from a German car company for a total of $500,000 from Germany. What would the effect of this trade deal be on the United States' GDP?

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16-11-2021
Mathematics

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An American car company sells 200 vehicles to Germany for a total of $600,000, While the United States imports 100 cars from a German car company for a total of $500,000 from Germany. What would the effect of this trade deal be on the United States' GDP?

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Parrain Parrain · Answer 1 · 2021-11-19T13:44:01+01:00

As a result of the transactions of the American car company, the trade deal will have the effect of increasing U.S. GDP by $100,000.

One of the components of GDP is Net exports which is calculated as:

= Exports - Imports

In this scenario, the net exports are:

= Cars sold to Germany - Cars imported from Germany

= 600,000 - 500,000

= $100,000

In conclusion, the $100,000 difference would be added to U.S. GDP.

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An American car company sells 200 vehicles to Germany for a total of $600,000, While the United States imports 100 cars from a German car company for a total of $500,000 from Germany. What would the effect of this trade deal be on the United States' GDP?​

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An American car company sells 200 vehicles to Germany for a total of $600,000, While the United States imports 100 cars from a German car company for a total of $500,000 from Germany. What would the effect of this trade deal be on the United States' GDP?