Question

2. Activities included (and not included) in the calculation of GDP The gross domestic product (GDP) of the United States is defined as the all in a given period of time. Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2018. 2018 GDP Included Excluded Scenario Athleticus, a U.S. shoe company, produces a pair of sneakers at a plant in Vietnam on March 27, 2018 Athleticus imports the pair of sneakers into the United States on May 18, 2018. Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 9, 2018. An elementary school student buys the chocolate bar on December 24 The Jones family buys an antique silver platter at an auction in upstate New York on March 27, 2018. Graincorp, a U.S. agricultural company, produces corn syrup at a plant in Iowa on September 25, 2018. It sells the corn syrup to Crunchy's for use in the production of cereal that will be made in the United States in 2018. (Note: Focus exclusively on whether production of the corn syrup increases GDP directly, and ignore the effect of production of the cereal on GDP.) Tasty's, a U.S. fast-food company, produces a hamburger at one of its many St. Louis locations on January 14, 2018. It sells the hamburger to a customer that same day.

Answer 1

GDP is the sum of all final goods and services produced in a given year.

Scenario 1-Included in net exports

Scenario 2-Included in consumption.

Scenario 3-Not include as it is a used commodity.

Scenario 4-Not included as it is an intermediate good

Scenario 5-Included in consumption