For each of the following, state which 2017 U.S. GDP category or categories (C,

Question

For each of the following, state which 2017 U.S. GDP category or categories (C, I, G, NX) are affected and whether 2017 U.S. GDP will rise/fall/stay the same. Briefly explain.

a) In December 2017, Carr, an American, buys a bottle of champagne produced in France in 2017.

b) In January 2018, Mack, an American buys a 2017 Tesla Model S produced in California.

c) In November 2017 Cooper, an American hires a US tax accountant to help with year-end

individual tax planning.

d) In October 2017, Del Rio, an American buys a home in Castro Valley, CA. The home was just

constructed in September 2017.

Explanation / Answer

A) Imports (fall)

B) Consumption (rise)

C) Consumption (rise)

D) investment (rise)

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