Question

3. Categories of expenditures Felix and Janet Goldman live in Swarthmore, PA. Their son, Larry, owns his own plumbing business. For each of the following transactions that occur in their lives, identify whether it is included in the calculation of u.s. GDP as part of consumption (c), investment (), government purchases (G), exports (x), or imports (M). Check all that apply Transaction The Federal Aviation Administration expands the runways at Philadelphia International Airport, which is just a few miles from Felx and Janet's house. Felix's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China. Larry buys a new set of tools to use in his plumbing business. Janet gets a haircut. Janet buys a new BMW, which was assembled in Germany. Grade It Now Save & Continue Continue without saving

Answer 1

1. G
(As federal government is expanding the airport, so it is government expenditure)

2. X
(Services are exported in this example)

3. I
(New set if tools is purchased for business purpose so its an investment)

4. C
(Haircut is an example of consumption expenditure)

5. M
(BMW from Germany is imported)