7 ms·
> Income is not GDP. A US citizen buying a Chinese good does not contribute to US GDP. It does, just not very much. GDP is value added. So contribution of any
by ajuc 4y ago
> Income is not GDP. A US citizen buying a Chinese good does not contribute to US GDP.
It does, just not very much.
GDP is value added. So contribution of anything done in an economy is (selling price - sum of buying prices of components and services needed to make the thing). So if you buy stuff abroad for 80 USD and import it for 20 USD and sell it in US for 105 USD - you increased American GDP by 5 USD.
- PeterisP 4y agoAnd if a USA retailer imports a container of some sweatshop-made clothing for $5 each and retails them for $50 each, that's $5 in China's GDP and $45 for USA GDP, because technically the import-to-retail markup is added value.