Treetopplers, a U. S. lumber company, produces wood at a plant in Oregon on September 13, 2017. It sells the wood to Buildit and Partners, a developer, for use in the production of a new house that will be built in the United States in 2017. (Note: Focus exclusively on whether production of the wood increases GDP directly, and ignore the effect of production of the new house on GDP.)

Included or exclunded.

Question

Business

Isaac Hays

3 February, 13:28

Treetopplers, a U. S. lumber company, produces wood at a plant in Oregon on September 13, 2017. It sells the wood to Buildit and Partners, a developer, for use in the production of a new house that will be built in the United States in 2017. (Note: Focus exclusively on whether production of the wood increases GDP directly, and ignore the effect of production of the new house on GDP.)

Included or exclunded.

+3

Answers (1)

Know the Answer?

Miriam Douglas · Answer 1

The answer is: Treetopplers's wood production is not included in the GDP

Explanation:

The GDP includes all the domestic production of final and legal goods and services.

The value of final goods is included, but not the parts that go into them (intermediate goods). In this case, the wood Treetopplers produce is used by other companies (e. g. Buildit and Partners) to build final goods such as new houses. So the wood is an intermediate good.