March 29, 2015

Homework Help: Economics

Posted by Sam on Wednesday, May 23, 2007 at 11:40pm.

Can someone please help. What components of GDP (if any) would each of the following transactions affect? Explain.

a. A family buys a new refridgerator.
b. Aunt Jane buys a new house.
c. Ford sells a Mustang from its inventory.
d. You buy a pizza.
e. California repaves Highway 101.
f. Your parents buy a bottle of French wine.
g. Honda expands its factory in Marysville, Ohio.

Please help asap.

its not clear from your question whether you want a general answer or a specific answer. Generally, GDP is the sum of Consumption (C) + Investent (I) + Government spending (G) + net exports (M). So, a) C, b) I, c) ?? (C-I), d) C, e) G, f) -M, g) I.

More specifically, each of these has several sub-categories. For a list of the categories, go to the National Income and Product Accounts (NIPA) at (BEA dot gov).

Im needing a specific answer please. I need to know what compenents of GDP are affected by those transactions.

So, go to BEA dot gov then click on the link to Gross Domestic Product, You should (eventually) find a table with the components GDP. So, a refridgerator would be personal expenditure -- durable goods.

Take it from here.

hint: I think c) Ford sells a mustang from inventory would be a plus in Personal expenditure, durable goods and a minus in change in private inventories.

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