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.
see my response to your 11:40 post
Sure! I'd be happy to help you understand which components of GDP are affected by each of these transactions.
a. When a family buys a new refrigerator, it contributes to the consumption component of GDP. Consumption represents the money spent on goods and services by households.
b. When Aunt Jane buys a new house, it does not directly affect GDP. The purchase of existing homes is not included in GDP calculations as it is considered a transfer of assets.
c. When Ford sells a Mustang from its inventory, it contributes to the investment component of GDP. Investment represents the spending on capital goods by businesses to increase future production.
d. When you buy a pizza, it also contributes to the consumption component of GDP.
e. When California repaves Highway 101, it contributes to the government spending component of GDP. Government spending represents the expenditures made by the government on goods and services.
f. When your parents buy a bottle of French wine, it contributes to the consumption component of GDP.
g. When Honda expands its factory in Marysville, Ohio, it contributes to the investment component of GDP. The expansion of the factory represents spending on capital goods by businesses to increase future production.
To determine the specific components of GDP impacted by these transactions, you need to understand the different components of GDP, which include consumption, investment, government spending, and net exports. By analyzing the nature of each transaction, you can identify which component(s) it falls under.