A steel company sells some steel to a bicycle company for $150. The bicycle company uses the steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute .

a. $150 to GDP. b. $250 to GDPc. between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle. d. $400 to GDP .

b. $250 to GDP

Explanation:

GDP is the value of all the goods and services produced in a country per period. The GDP value communicates economic directions for the country. An increase in its value implies economic growth. When calculating the GDP, economists consider the value of finished consumer goods only.

The steel sold to the bicycle making company will not be considered in GDP. It is a capital good used to make another product. If included, it would result in double-counting as the steel would be counted again as a final product. Only the value for $250 will be included in the GDP as the bicycle is a final product.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.