With the rise of globalization, supply chains now spread across the world. Consider the following simplified stages of production for a smartphone:a) The U.S.-based smartphone company develops the designs for the new smartphone.b) A rare minerals broker in China buys

$15

billion worth of minerals from around the world, including

$4

billion from U.S. mines.c) A microchip producer in Japan buys half of these minerals for $10 billion; a camera and screen producer in South Korea buys the other half for $10 billion.d) A manufacturing factory in China buys the microchip, cameras, and screens for $22 billion; it obtains the rest of the assembly materials domestically for $3 billion.e) The U.S.-based smartphone company pays the factory

$27

billion for the manufactured phones. It programs and uploads the software. Any updates from previous versions of the software are available for existing phone owners as a free download.f) The company keeps

$11

billion worth of smartphones in inventory, then sells the rest to U.S. retailers for

$26

billion.g) The retailers sell the phones in the United States, for a total of

$30

billion in revenue.Part 2Given the information above, which of the following is true of the value added portions of the production process that will count towards U.S. GDP?

A.

It includes

$15

billion from the manufacturing factory in China, $10 billion from the microchip producer in Japan, and $5 billion from U.S. retailers.

B.

It includes $10 billion from the manufacturing factory in China, $10 billion from the microchip producer in Japan, and $15 billion from the U.S.-based smartphone company.

C.

It includes

$4

billion from U.S. mines for raw materials,

$18

billion from the U.S.-based smartphone company, and

$4

billion from U.S. retailers.

D.

It includes

$4

billion from U.S. mines for raw materials,

$10

billion from the U.S.-based smartphone company, and

$4

billion from U.S. retailers.

Part 3 Given the information above, how much does the production of a smartphone contribute to U.S. GDP in total?The production of a smartphone contributes

$ enter your response here

billion to U.S. GDP.