Homework Help: Macroeconomics: GDP

Posted by Anonymous on Thursday, January 29, 2009 at 11:49pm.

John (who lives in "Statsyan"--nation) buys a new mini Cooper, which is assembled in England. What part of the GDP component(s) does this transaction belong to?

I'm thinking it belongs to both the imports and consumption categories, but I'm not sure if it is possible to list one transaction under more than one GDP component.

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IKEA, a Swedish furniture store, produces a good at a plant in Quebec on June 4th 2005,. It sells the table to *collegeCAN* student on February 7th 2006. Would this transaction be included in *theUSCAN*'s GDP in 2006?

I'm confused by this question because of the way it is worded...I'm thinking it is not part of the GDP because the nation, *theUSCAN* isn't the same as *collegeCAN*??? These two are two different nations??? So confused...

Macroeconomics: GDP - economyst, Friday, January 30, 2009 at 8:58am
1) I believe you are correct, the mini is both consumption C and an import M. In the GDP measure they cancel each other out, so the purchase does not change GDP.

2) I too am confused by the question. Sorry.

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