Back to Assignment Keep the Highest: /1 Attempts: 3. Categories of expenditures

Question

Back to Assignment Keep the Highest: /1 Attempts: 3. Categories of expenditures Felix and Janet Goldman live in Swarthmore, PA. Janet's father, Larry, lives in Sweden. 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 (), government purchases (G), exports (X), or imports (M). Check all that apply. Transaction Felix's employer upgrades all of its computer systems using U.S.-made parts. Janet's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. Felix buys a sweater made in Guatemala. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. Janet gets a new refrigerator made in the United States. Grade It Now Save & Continue Continue without saving

Explanation / Answer

Transaction 1: Investment (I)

Explanation: Expenditure on the computer systems is a capital expenditure by the business. So, it is an investment.

Transaction 2: Export (X)

Explanation: Vermont maple syrup is produced in the USA and it is being exported to Sweden.

Transaction 3: Import (M)

Explanation: The sweater made in Guatemala is being imported to the USA.

Transaction 4: Government Purchases (G)

Explanation: Here, the state government is spending to improve infrastructure.

Transaction 5: Consumption

Explanation: This is a final good being purchased by a consumer for final consumption.

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