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QUESTION

Suppose a company exports all of its $7 M worth of its output.

Suppose a company exports all of its $7 M worth of its output. It imports $1 M worth of raw material, pays its workers $3 M in wages, pays its creditors $2 M in interest, and retains $1 M in profits for its owners. This company's operations add $6 M to GDP whether measured by the value added approach, the expenditure approach, or the income approach. Is this statement true of false?

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