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aniked [119]
3 years ago
5

Amy has a card shop. She receives a shipment of Valentine's Day cards in December 2011 made by a card manufacture in that month.

Amy pays the wholesale distributor of the cards a total of $500. In February 2012, she sold all the cards for a total of $800. What are the contributions of these transactions to GDP in 2011 and 2012?
Business
1 answer:
Firdavs [7]3 years ago
6 0

Answer:

The contributions of these transactions is a reduction to GDP by $500 in 2011 and an increase in GDP by $800 in 2012.

Explanation:

GDP is the abbreviation for gross domestic product which is the monetary value of all finished products (goods and services) made within a country during a specific period (usually a year). In the determination of a country's GDP, imports are subtracted while exports or sales are added.

Therefore considering that Amy received a shipment of Valentine's Day cards in December 2011 paying a total of $500 and sold all the cards for a total of $800 in February 2012, the contributions of these transactions is a reduction to GDP by $500 in 2011 and an increase in GDP by $800 in 2012.

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Durable Goods $1,250 Nondurable Goods $2,130 Services $9,000 Fixed Investment $1,800 Changes to Business Inventory $135 Investme
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Given that,

Durable Goods = $1,250

Non-durable Goods = $2,130

Services = $9,000

Fixed Investment = $1,800

Changes to Business Inventory = $135

Investment in Stocks & Bonds = $15,500

Federal Government Purchases = $1,800

State/Local Government Purchases = $1,700

Transfer Payments = $675

Exports from the United States = $2,100

Imports into the United States = $2,400

(a) Consumption, C = durable goods + non-durable goods + services

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                                = $12,380

(b) Private investment, I = Fixed investment + change in inventory + Investment in stocks/bonds

                                       = $1,800 + $135 + $15,500

                                       = $17,435

(c) Government spending, G = Federal government purchase + state/local government purchase

                                               = $1,800 + $1,700

                                               = $3,500

(d) Net exports = Exports - Imports

                         = $2,100 - $2,400

                         = -($300)

GDP = C + I + G + NX

        = $12,380 + $17,435 + $3,500 + (-$300)

        = $33,015

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