Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 7

Suppose a gold miner finds a gold nugget and sells the nugget to a mining company for $500. The mining company melts down the gold, purifies it, and sells it to a jewelry maker for $1,000. The jewelry maker fashions the gold into a necklace which it sells to a department store for $1,500. Finally, the department store sells the necklace to a customer for $2,000. How much has GDP increased as a result of these transactions?