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.
I apologize for any confusion earlier. Let me provide you with a more specific answer regarding the components of GDP that each of the given transactions would affect:
a. A family buys a new refrigerator: This would fall under the category of Personal Consumption Expenditure (C), specifically under durable goods.
b. Aunt Jane buys a new house: This transaction would affect the Investment (I) component of GDP because it involves the purchase of a capital asset. It would be specifically classified as gross private domestic investment.
c. Ford sells a Mustang from its inventory: This transaction impacts both Consumption (C) and Investment (I) components of GDP. It increases Personal Consumption Expenditure as a durable good is being sold, and simultaneously decreases the change in private inventories (a component of investment) for Ford.
d. You buy a pizza: This transaction falls under Personal Consumption Expenditure (C), specifically under the category of nondurable goods.
e. California repaves Highway 101: This would be categorized under Government Spending (G) because it involves a public infrastructure project.
f. Your parents buy a bottle of French wine: This transaction affects the net exports component of GDP (NX) as it involves the purchase of an imported good. It would be classified as an import (M).
g. Honda expands its factory in Marysville, Ohio: This transaction would fall under the Investment (I) component of GDP as it involves the expansion of a capital asset by a business.
Please note that these classifications are based on the general understanding of the components of GDP. To obtain the most accurate and up-to-date information, you should refer to the National Income and Product Accounts (NIPA) on the Bureau of Economic Analysis (BEA) website (bea.gov).