Download All About GDP

All About GDP
Part A
Is this counted as part of the GDP?
Which of the following are included and which are excluded in calculating the GDP? If
the transaction is included, indicate which variable of the GDP formula is affected.
GDP = C + I + G + (X-M)
1. Old MacDonald buys a new John Deere tractor to plow his fields.
2. Luigi the plumber purchases of a two-year old used truck.
3. Mike the mechanic fixes the radiator on his own IROC Z twin turbo.
4. The government’s purchase of a new submarine fleet for the Navy.
5. A barber’s income from cutting hair.
6. The sale of a Corvette at a Spanish dealership.
7. Root canal training for three new hygienists at Dr. Moore’s dentist office.
8. The purchase of a new pair of Nike running shoes. (*Nike manufactures in Indonesia)
9. The installation of a new basketball court at Oakwood Public High School.
10. The purchase of a vintage Miles Davis record at the Powder Springs Flea Market.
Part B
GDP: Where and what is counted?
For each of the following items, write one of the following in the space provided.
C if the item is counted as consumption spending
I if the item is counted as investment spending
G if the item is counted as government spending
X if the item is counted as exports
M if the item is counted as imports
NC if the item is not counted in the calculation of the GDP
_____11. You spend $7.00 to see the latest Justin Bieber movie.
_____12. A family pays a contractor $100,000 for a house he built for them this year.
_____13. A family pays $75,000 for a house built three years ago.
_____14. An accountant from Ernst & Young purchases a new Italian suit.
_____15. The government increases defense expenditures by $1,000,000,000
_____16. A homemaker works hard caring for her spouse and two children.
_____17. Ford Motor Company buys new auto-making robots.
_____18. Apple Computer builds a new factory in the United States.
_____19. You buy a new Toyota Tacoma that was made in Japan.
_____20. A Japanese airline purchases two new Boeing 747s (*these are made in WA)