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ozzi
4 years ago
9

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in:

Business
1 answer:
tatuchka [14]4 years ago
8 0

Answer:

The correct answer is letter "B": Mexican GDP, but it is not included in U.S. GDP.

Explanation:

The Gross Domestic Product or GDP is the overall market value of all the goods and services a country produces. The GDP measures the size of an economy and a country's growth. A nation's GDP is determined with the following formula:

GDP = C + G + I + NX

Where:

C = private consumption or consumer spending

G = government spending

I = businesses' capital spending

NX = Net exports (exports - imports)

In that case, as Martin purchases the motorcycle in Mexico, the purchase will be part of the consumer spending of Mexico's GDP, not the U.S.

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