Question

Based on this definition, indicate which of the following transactions will be included or excluded in (that is, directly increase the GDP of the United States in 2015.
a. Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 2, 2017. An elementary school student buys the chocolate bar on December 18.
b. Tasty's, a U.S. fast-food company, produces a hamburger at one of its many St. Louis locations on January 21, 2017. It sells the hamburger to a customer that same day.
c. Rotato, a U.S. tire company, produces a set of tires at a plant in Michigan on September 5, 2017. It sells the set of tires to Speedmaster for use in the production of a two-door coupe that will be made in the United States in 2017. (Note: Focus exclusively on whether production of the set of tires increases GDP directly, and ignore the effect of production of the two-door coupe on GDP.)
d. Roadway Motors, a U.S. automobile company, produces a convertible at a plant in Germany on March 10, 2017.
e. Roadway Motors imports the convertible into the United States on May 19, 2017. The Jones family buys an antique silver platter at an auction in upstate New York on March 10, 2017.

Answer 1

Answer:

INCLUDED

included

excluded

excluded

excluded

Explanation:

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

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Items not included in the calculation off GDP includes:    

1. services not rendered to oneself

2. Activities not reported to the government    

3. illegal activities  

4. sale or purchase of used products  

5. sale or purchase of intermediate products

A. The purchase of the chocolate is included in GDP as part of consumption spending on non-durables

b. The purchase of the hamburger is included in GDP as part of consumption spending on non-durables

c.  the tire sold is not included in US GDP because it is an intermediate good. An intermediate good is a good that is used in the production of other goods. The tire is used as an input in the production of a two-door coupe

d. The automobile would be recorded as part of Germany's GDP and not US' GDP

e. Only goods produced in the current year are included in GDP. including the antique would be double counting. It would not be included in GDP