Question

4. which of the following sales would NOT involve a US final good but would be counted indirectly to increase US gdp?

a. wine produced in the US sold to and used by a US restaurant in recipes to produce food

b. wine produced in the US and sold to US households who use the wine for cooking purposes only

c. wine produced in france and sold to and used by a US restaurant in recipes to produce food

d. wine produced in the US and sold to a canada restaurant for sale to canada customers

e. wine produced in the US and bought by the city of new york for parties to recieve foreign visitors

Answer 1

The goods which are used in the production of Other goods are known as the intermediate goods. These intermediate goods are not the final goods and therefore their sales are not included in the the US GDP. However they are counted indirectly as their value is included in the final good or service in whose production are the used.

Going by this logic a wine produced in the US sold to and used by a US restaurant in recipes to produce food is an intermediate good. The sale of wine would not involve a US final Good as it is an intermediate good because it is used by the restaurant in the production of food. The value of wine would be counted indirectly to increase US GDP.

Hence, Option a is Correct. i.e, a wine produced in the US sold to and used by a US restaurant in recipes to produce food.