Question

Determine whether each transaction below would be included in GDP, and if so, indicate which category it would fall under Assume all goods and services are produced in the domestic country unless otherwise stated. A. The city government purchases new playground equipment for the park. Included in GDP under consumption expenditures Included in GDP under net exports Not included in GDP Included in GDP under gross investment Included in GDP under government expenditures B. Sam purchases shares of Apple stock. Included in GDP under gross investment Not included in GDP Included in GDP under net exports Included in GDP under government expenditures Included in GDP under consumption expenditures C. The Smith family purchases a new boat. Included in GDP under gross investment Not included in GDP Included in GDP under consumption expenditures

Answer 1

Answer:

A. Included in GDP under government expenditures

B. Not included in GDP 

C. Included in GDP under consumption expenditures

Explanation:

Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.

Gross domestic product can be calculated using the expenditure approach:

GDP = Consumption spending on both durable and non durable goods and services + business spending on cqpital goods + Government Spending on public goods and services + Net Export

Items not included in the calculation of GDP are :

1. Transfer payments

2. Illegal activities

3. Purchase of shares

4. Intermediate goods

I hope my answer helps you