The process of making a car in North American involves an exceptional amount of cross-border interaction....

The process of making a car in North American involves an exceptional amount of cross-border interaction. To sketch out the production of a $20, 000 car:

(a) A company in Pittsburgh mines $5, 000 worth of steel from iron they mine themselves
(b) A company in Toledo makes $1, 000 worth of glass from silica they mine themselves
(c) A company in Akron makes $500 worth of tires from rubber they buy from Cote d’Ivoire for $5.

These inputs are purchased by a company in Detroit who also has affiliates in Northern Mexico and Canada. They

(a) Make $3, 000 worth of upholstery and chairs in Mexico

(b) Pay Canadians $500 to make sure the car seems generally agreeable

The Detroit company then sell the car to their (independently owned) dealer for $20, 000. The dealer finally sells it to a customer in New York for $25, 000. At the last minute, the salesman gets the customer to get an undercoat for $1,000 because, you know, it’s a good idea what with the road salt.

What was contribution to US GDP from the car? For each company involved, what is the value-added?

Expert Solution

Answer)

Rahul Sunny answered 2 years ago

Describe the process of a cross-border acquisition.

Describe the process of developing cross-cultural interaction skills.?

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