For each of the following transactions, indicate: Whether the goods or services
ID: 1116948 • Letter: F
Question
For each of the following transactions, indicate: Whether the goods or services involved in the transaction are included in current GDP: explain briefly why or why not. (NOTE: ncluded in GDP" means that the good or service adds to the size, or increases the value, of GDP). Under what category (or categories) of expenditure the transaction falls (C, I, G, X IM, or none). Unless you are told otherwise, you can assume that all goods and services mentioned below are new and made in the U.S. a. You purchase a $900 suit that was made in Italy. b. Jane receives $200 in unemployment insurance benefits from the State of California c. The city of Los Angeles spends $1 million repaving Eagle Rock Boulevard. d. US Steel purchases a new S10 million steel-rolling machine for its factory e. Ford purchases $4,000 worth of steel to make fenders for its cars. f. Josh buys a 2003 GM car that has been sitting on the dealer's lot for 2 years. g. The Los Angeles Times buys a U.S.-made laptop computer for one of its reporters. h. Jason buys a plot of land for S100,000. i. British Airways buys a new aircraft from Seattle-based Boeing.Explanation / Answer
a) Consumption ( An amt. is spent for his own use hence, consumption)
b) Government expenditure ( social benefits and pension mayments are included in govt. expenditure)
c) Investment ( spending on infrastructure comes in the category of investment by the government)
d) Investment ( the amt invested in purchase of equipment will give greater returns in the future)
The four mentioned above transactions will forma part of teh GDP.
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