Question

 Which of the following transactions would be included in the official calculation of GDP under the expenditure method?

 You make cookies to give as a gift to your parents.

 You buy a new iPod for listening to music.

 You illegally download music off the Internet to put on your new iPod.

 Bridgestone sells $2 million worth of tyres to General Motors Holden.

 A student buys a used textbook at the bookstore.

Answer 1

Answer-B, you buy a new iPod for listening music.

The expenditure method for ascertaining GDP centers around expenditures. Presently expenditure alludes to all the purchases made by residents, government, or business endeavors. The expenditure method thinks about the accompanying components:

Purchase of customer goods and services by inhabitants and family units (C)

Government spendings on goods and services (G)

Business undertakings' expenditure on capital goods and stocks (I)

Net (exports-imports) (NX)

Consequently, as indicated by the expenditure strategy:

GDP= C + G + I + NX

Be that as it may, the expenditure method doesn't include expenditure on second hand goods and purchase of share and securities.

A- as per above definition, gifting cookies is not included in GDP because neighbours do not purchase cookies, so here's no expenditure occurs.

C-Illegal purchasing or selling of goods and services is not part of calculation of GDP. Because there is nothing recorded transaction happens.

D- Expenditure method includes only purchasing of goods and services, do not include selling.

E- As per definition expenditure on second hand goods is excluded from GDP calculation.