Question

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. Scenario 2018 GDP Included Excluded The Jones family buys an antique silver platter at an auction in upstate New York on March 27, 2018. Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 14, 2018. It sells the car at a dealership in Houston on February 12, 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. 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. Rotato, a U.S. tire company, produces a set of tires at a plant in Michigan on September 25, 2018. It sells the set of tires to Speedmaster for use in the production of a two-door coupe that will be made in the United States in 2018. (Note: Focus exclusively on whether production of the set of tires increases GDP directly, and ignore the effect of production of the two-door coupe on GDP.)

Answer 1

Answer:

PART-1) The gross domestic product (GDP) of the United States is defined as the market value of all final goods and services produced if within the United States if in a given period of time

PART-2)

1) Excluded. Roadway Motors is a U.S. company, however as it produces the convertible in Germany, the output will be part of the GDP of Germany, not the GDP of the United States

2) Excluded. Since the accountant has provided her services during 2018, the value of those services will be included in 2018 GDP, not in the year 2017 GDP

3) Included. The Zippycar example is straightforward and should clearly count as something produced in the United States in 2015. The gross domestic product (GDP) of the United States refers to the market value of all the final goods and services produced within the United States in a given period of time

4) Included. Although Fastlane is a Japanese company, the sedan is produced within the United States and should be included in the GDP of the United States

5) Excluded. The gross domestic product (GDP) of the United States refers to the market value of all the final goods and services produced within the United States in a given period of time, such as a year or quarter.