Question

For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction C I G X M The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. Musashi buys a sweater made in Guatemala. Rina gets a new refrigerator made in the United States. Rina's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. Musashi's employer upgrades all of its computer systems using U.S.-made parts.

Answer 1

Answer:

(a.) The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. – This will fall under the category of Government Spending(G)

Reason: In this case the government is utilizing money in order to construct highway that will benefit public.

(b.) Musashi buys a sweater made in Guatemala –This will fall under the category of imports(M)

Reason: The product/commodity is being produced outside domestic boundaries, hence it is calculated under imports

(c.) Rina gets a new refrigerator made in the United States. - This will fall under the category of consumption(C)

Reason: Commodities produced within the domestic boundaries and further consumed or bought within domestic boundaries will be calculated under consumption

(d.) Rina's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. - This will fall under the category of exports(X)

Reason:  Here the maple syrup is being delivered to a third party living abroad so it will be calculated under export .

(e.) Musashi's employer upgrades all of its computer systems using U.S.-made parts. - This will fall under the category of investment(I)

Reason:  Money spent to upgrade the system in order to increase productivity and this indeed will have an effect for a long duration. Therefore it'll be seen as an investment.