Question

Check all that apply.

Yakov,and Ana Garibaldi live in Swarthmore, PA. Ana's father, Charles, lives in Sweden. 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 town of Swarthmore puts on a fireworks display for the Fourth of July. Ana's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. Ana gets a haircut. Ana buys a new BMW, which was assembled in Germany Yakov's employer upgrades all of its computer systems using U.S.-made parts. 曰 Q

Answer 1

GDP is the market value of final goods and services produced within the domestic territory of a country during one year. Components of GDP are:

a) Private Final Consumption Expenditure (C): It refers to expenditure on final goods and services by the individuals, households, and non-profit private institutions serving society. It includes: consumer services, consumer non durable goods and consumer durable goods.

b) Government final consumption expenditure (G): It refers to expenditure on final goods and services by the Government like expenditure on purchase of goods for consumption by the defence personnel.

c) Investment expenditure (I): It refers to expenditure on final goods and services by the producers. Example: expenditure by the farmers on the purchase of tractors or thrashers. It includes fixed investment and inventory investment.

d) Net exports refers to the difference between exports and imports during an accounting year. Exports are an expenditure by the foreigners on the domestically produced final goods and services while imports are an expenditure on the goods and services produced abroad.

1. Government spending, G

2. Import, M

3. Consumption expenditure, C

4. Import, M

5. Investment spending, I