Suppose a group of British investors finances the construction of a plant to manufacture skateboards in St. Louis, Missouri.
The construction of the plant will increase U.S. GDP.
Suppose the plant generates $300,000 in corporate profits this year. These profits will decrease U.S. GDP for which of the following reasons?
Profits are not a component of GDP.
Only losses count against GDP.
Profits earned in the domestic economy are counted as part of GDP under the resource cost-income approach.
Foreign income earned within U.S. borders must be deducted from production.
