AP Macroeconomics Question 27: Answer and Explanation

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Question: 27

1. Which of the following is included in U.S. GDP?

I. The market value of movies made in Africa by U.S. citizens

II. The market value of olive oil made in Italy and sold in the United States.

III. The market value of blue jeans made in the United States and sold in Japan

IV. The market value of wine made in the United States by Canadian citizens

  • A. II, III, and IV only
  • B. I and III only
  • C. II and IV only
  • D. IV only
  • E. III and IV only

Correct Answer: E


E U.S. GDP is the total market value of all final goods and services produced in a year within the United States. Because the movies and olive oil were produced elsewhere, they can be ruled out. GDP includes net exports (exports minus imports), so even though they were exported, the blue jeans are included in GDP since they were made in the U.S. The wine is included as well, because although Canadians make it, it fits the criteria of being produced within the United States.