ECON Indicate whether the following transactions would be included in GDP. If they are included, indicate...

ECON

Indicate whether the following transactions would be included in GDP. If they are included, indicate which component (consumption, investment, government consumption and gross investment, or net exports) of GDP would be affected.

a. A Czech student attending school in Florida takes a summer job as a lifeguard.

b. A New York company buys welding equipment from a St. Louis firm to help it build jet fighters.

c. The IRS purchases a new computer from the GATS computer company (an American-owned business producing and operating in Germany) that will allow it to better detect income tax evasion.

Expert Solution

a,b option affect GDP.please find the following explanation:

a)first one is considered as production of consumption services (life saving)in GDP.

b) second one considered as an investment expenditure in GDP.

c)This one is considered as government gross investment in Gross National Product (GNP)but does not affect GDP.

Rahul Sunny answered 2 years ago

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