Principles of Macroeconomics 7th Edition

Published by South-Western College
ISBN 10: 1-28516-591-8
ISBN 13: 978-1-28516-591-2

Chapter 10 - Measuring a Nation's Income - Questions For Review - Page 214: 2

Answer

Production of luxury cars will contribute more to GDP than the production of an economy car because of simple reasons. The luxury car holds a higher market value than an economy car and is therefore greater in GDP contribution.

Work Step by Step

This is just an application question with common knowledge. Luxury items sell for more value than regular products.
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