For each of the following, determine if it would count in the calculation of GDP or...

For each of the following, determine if it would count in the calculation of GDP or not.

(a) You pay tolls on the Pennsylvania highway

(b) Government increases spending on food stamp.

(c) Company A buys steel from Company B. Company A plans to use the steel to make cars.

(d) Amy purchases a puppy from a farmer with a reputation for not paying taxes

(e) Mary buys cheese and dough from Fred Meyer to bake a pizza at home for her own consumption.

(f) Andy is unemployed. He received unemployment benefit from the government and used the money to buy food.

Expert Solution

Answer (a) tolls on the pennsylvania highway will be included in the calculation of GDP

Answer (b) Government increases spending on food stamp will be included in calculation of GDP since it is a government expenditure

Answer (c) company A plans to use the Steel to make cars will not be included in calculation of GDP because steel is an intermediate good

Answer (d) amy purchases a puppy from a farmer with a reputation for not paying taxes will not be included in calculation of GDP because purpose is not legal as she is just purchasing for tax evasion

Answer (e) mary buys cheese and dough from Fred Meyer to bake a pizza at home For her own consumption this will be included in calculation of GDP because it is a consumption expenditure

Answer(f)andy is unemployed.He recieved unemployment benefits from the government and used the money to buy food.This will be included in calculation of GDP this is because it is a government expenditure

Rahul Sunny answered 2 years ago

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