Question

Problem #3: what component of GDP (C, l, G, NX), if any, would each of the following transactions affect? Explain A. Aunt Aisha buys a new house. B. You buy a pizza from Herfy in Faisaliya C. Honda expands its factory in Jeddah D. A family buys a new refrigerator E. Hafr Al Batin repaves the Riyadh Highway Problem #4: The following data on capital stock (plant, equipment, housing and inventory) are available for the Republic of Capika for the year of 2015 Stock of capital on January 1, 200S: $12,000 billion. Stock of capital on December 31,2005: S12.900 billion From this one can conclude that in 2005, the level of net investment-S

Answer 1

Given that, Gross Domestic Product (GDO) is defined as the sum of final values of all goods and services produced with in an economy dugong a particular period It has four Components and net experts. (a) Aunt Aisha boys a new house? given to buying a new house by aunt Contributes to the investment Component of GDP. Investment is money spent on purchases of capital equipment, investors, and structure However, this also includes household purchase of new housing (b) You buy a pizza from herfy in Faisaliya? The transaction of buying a pizza contributes to the consumption component of GDP Consumption is expenditure on goods and services by the household Goods include both the durable and non-durable goods. Example of durable goods is refrigerators, and non-durable goods are food and clothing service cuire those which are physically visible, but can be felt such as the intangible items as the medical care education etc. \r\n (c) Honda expands its factory in jectiah?