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.
1) Calculo, a U.S. electronics company, produces a calculator at a plant in Indonesia on March 22, 2018. Calculo imports the calculator into the United States on May 27, 2018.
2) Graincorp, a U.S. agricultural company, produces corn syrup at a plant in Iowa on September 6, 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 the production of the corn syrup increases GDP directly, and ignore the effect of the production of the cereal on GDP.)
3) Tasty's, a U.S. fast-food company, produces a hamburger at one of its many St. Louis locations on January 12, 2018. It sells the hamburger to a customer that same day.
4) An accountant starts a client's 2018 tax return on April 14, 2019, finishing it just before midnight on April 15, 2019.
5) Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 12, 2018. An elementary school student buys the chocolate bar on December 30.

Answer 1

Answer:

The gross domestic product (GDP) of the United States is defined as the sum of all goods and services produced in America in a given period of time.

Therefore, options 2, 3, 4 and 5 are included on America's GDP, as all of them are produced in American territory.

Explanation:

Gross domestic product is a macroeconomic indicator reflecting the market value of all final goods and services (intended for direct consumption or use) produced in a year in all sectors of the economy on the territory of the United States, regardless of the nationality of the factors of production used.

Option 1 refers to an American company that produces in Indonesia, therefore its production would be counted for the Indonesian GDP.

All other options refer to goods or services produced in America, therefore they have to be included in American GDP.