Question

In: Economics

Which of the following transactions would be included in this year's GDP for thet United States?




 Which of the following transactions would be included in this year's GDP for thet United States?

 a) Jennifer buys a rug imported from Mexico.

 b) Melissa buys stock in an American textile company.

 c) Jennifer purchases a table over the Internet from a North Carolina furniture manufacturer.

 d) Melissa purchases a table over the Internet from a Mexican manufacturer.


Solutions

Expert Solution

Answer
Option c

GDP is
Y=C+I+G+NX
C=consumption
I=investment spending
G=govenment spending
NX=net export means import is not added
It is a sum of final goods and services
Stock is not the final investment it is an old investment
The tale from Carolina furniture is not an import and it is a final product so it is added to GDP
The table from Mexican manufacturer is an import


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