Brady pays $37,450 for a new car, including a federal excise tax of $700 and a state sales tax of $1,750. The indirect business tax value added to GDP under the income approach for this purchase is
A. $2,450 because this is income for the government.
B. $2,450 because this is profit for the firm.
C. $700 because only federal taxes are included in indirect business taxes; state taxes are excluded.
D. $1,750 because only state taxes are included in indirect business taxes; federal taxes are excluded.
Answer: A
Economics
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