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Scenario: After meeting with your lawyer, you submit payment for that consultati

ID: 1133093 • Letter: S

Question

Scenario: After meeting with your lawyer, you submit payment for that consultation.

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

Scenario: Your brand-new economics textbook that you purchased from the campus bookstore.

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

Scenario: The transaction fee charged for the purchase of Microsoft stock.

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

Scenario: The purchase of a U.S. Treasury Bond by an individual.

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

Scenario: The construction of a new building which will contain a brewery.

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

Scenario: The sale of a previously occupied house.

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

The food used to prepare a home cooked meal (assume the food is not home-grown or imported).

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

The services of a household resident involved in preparing a home cooked meal for their family.

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

A dinner at a restaurant.

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

A television produced in the U.S. in 2011 (market value = $350), but not sold in 2011. Instead it is sold in 2012, to a consumer within the U.S. for $325. Explain the results for 2011 and the results for 2012.

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

Explanation / Answer

Scenario

Does the scenario provide count toward the GDP (yes or no)?

If YES, the reason is

A "final” " good or service” must have been produced within the domestic territory of a country in a given year.

Under which component or components:

Consumption (C), Investment (I), Government (G) Exports (EX) or Imports (IM)

After meeting with your lawyer, you submit payment for that consultation.

yes

Consumption [of service]

Scenario: Your brand-new economics textbook that you purchased from the campus bookstore.

yes

Consumption [of goods]

Scenario: The transaction fee charged for the purchase of Microsoft stock.

yes

Consumption [of service]

Scenario: The purchase of a U.S. Treasury Bond by an individual.

yes

investment

Scenario: The construction of a new building which will contain a brewery.

yes

investment

Scenario: The sale of a previously occupied house.

No

Reason- nothing new is being produced in this transaction.

The foods used to prepare a home-cooked meal (assume the food is not home-grown or imported).

yes

Consumption [of goods]

The services of a household resident involved in preparing a home cooked meal for their family.

No

Since such services don’t result in any new goods to be used in any economic activity and the product is consumed within home itself they are not counted in GDP.

A dinner at a restaurant.

yes

Consumption [of services]

A television produced in the U.S. in 2011 (market value = $350), but not sold in 2011.

Instead it is sold in 2012, to a consumer within the U.S. for $325.

Explain the results for 2011 and the results for 2012.

Yes

But in year 2011

Since the good is produced in 2011 it will be counted in 2011 year GDP for $350.

This will not be accounted in year 2012 calculation.

Scenario

Does the scenario provide count toward the GDP (yes or no)?

If YES, the reason is

A "final” " good or service” must have been produced within the domestic territory of a country in a given year.

Under which component or components:

Consumption (C), Investment (I), Government (G) Exports (EX) or Imports (IM)

After meeting with your lawyer, you submit payment for that consultation.

yes

Consumption [of service]

Scenario: Your brand-new economics textbook that you purchased from the campus bookstore.

yes

Consumption [of goods]

Scenario: The transaction fee charged for the purchase of Microsoft stock.

yes

Consumption [of service]

Scenario: The purchase of a U.S. Treasury Bond by an individual.

yes

investment

Scenario: The construction of a new building which will contain a brewery.

yes

investment

Scenario: The sale of a previously occupied house.

No

Reason- nothing new is being produced in this transaction.

The foods used to prepare a home-cooked meal (assume the food is not home-grown or imported).

yes

Consumption [of goods]

The services of a household resident involved in preparing a home cooked meal for their family.

No

Since such services don’t result in any new goods to be used in any economic activity and the product is consumed within home itself they are not counted in GDP.

A dinner at a restaurant.

yes

Consumption [of services]

A television produced in the U.S. in 2011 (market value = $350), but not sold in 2011.

Instead it is sold in 2012, to a consumer within the U.S. for $325.

Explain the results for 2011 and the results for 2012.

Yes

But in year 2011

Since the good is produced in 2011 it will be counted in 2011 year GDP for $350.

This will not be accounted in year 2012 calculation.

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