A jeans manufacturer operates twin plants- one in Juarez, Mexico and the other in El Paso, Texas. The Juarez plant cuts fabric for the jeans, and the El Paso plant assembles the pieces into finished jeans. In a given year, the Juarez plant ships $40 million worth of cut fabric to the El Paso plant which, in turn, adds $60 million of additional value. In the end, $100 million of final product comes out of the El Paso plant. One half of these jeans are sold in the United States, and the other half are shipped to retailers in France. How would this activity be reflected in U.S. GDP and its components?
A jeans manufacturer operates twin plants- one in Juarez, Mexico and the other in El Paso, Texas. The Juarez plant
cuts fabric for the jeans, and the El Paso plant assembles the pieces into finished jeans. In a given year, the Juarez plant ships $40 million worth of cut fabric to the El Paso plant which, in turn, adds $60 million of additional value. In the end, $100 million of final product comes out of the El Paso plant. One half of these jeans are sold in the United States, and the other half are shipped to retailers in France.
How would this activity be reflected in U.S. GDP and its components?
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