The following events occurred in 2018 in the United States. Indicate the dollar
ID: 1136444 • Letter: T
Question
The following events occurred in 2018 in the United States. Indicate the dollar amount (if any) that is included in the investment component (IG) of GDP for 2018.
a. Walmart sells $20 million worth of 2017 new merchandise inventory $__________
b. A corporation issues $20 million in new common stock. $__________
It uses $12 million to build a new world headquarters, $3 million to
purchase new equipment, and $5 million to repay bank loans
c. The purchase of a two-year old office building for $4,000,000; $__________
the purchase price is 50% of appraised value
d. The purchase of 100 acres of unimproved land for $100,000 $__________
e. A household purchases a newly-built apartment for $300,000 $__________
f. A general contractor does $30,000 worth of remodeling to a condo $__________
g. A household invests $10,000 in a new stove for their home in Orlando $__________
h. A French firm builds a $20 million apartment complex in Illinois $__________
i. UCF builds a $20 million dormitory. $__________
j. A hurricane destroys a $20 million office building in Puerto Rico $__________
Explanation / Answer
Solution: Investment for the purpose of GDP includes everything excluding private consumption, government expenditure and net export. Thus it includes any new inventory, purchase of new equipment for production, purchase of new residential property even by a household. On the basis of this, following should be included in the investment for the purpose of GDP:
a. $0.
b.$35 million
c. $0.
d. $0
e.$300,000
f. $30000
g. $0
h. $20 million
i. $0
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