Discuss which of thefollowing activities will contribute in the U.S. GDP. Suppor

Question

Discuss which of thefollowing activities will contribute in the U.S. GDP. Support your responses

with

appropriaterationale.

•    Goods sourced and sold by Wal-Martsubsidiary in Mexico

•    Goods sourced and manufactured in China andsold by Wal-Mart in the U.S.

•    Services provided by Facebook’s data centerin India

•    Furniture produced and sold by IKEA’ssubsidiary in Ohio

•    AutoCAD training provided by a U.S. trainerto the architects of an architecture firm based

out of

Italy

•    Joe’s earning after selling his car to Jack

•    New iPhone sold in grey market

A grey marketincludes distribution channels, which are legal but are unofficial,unauthorized, or

unintended by theoriginal manufacturer for the trade of a product.

•    Opium sold in subways and parking lots

•    Earnings collected by selling the ticketsof Madonna’s dance show in Tokyo

•    Earnings by selling the tickets of IndianFilm Festival Awards in Texas

Explanation / Answer

•    Goods sourced and sold by Wal-Martsubsidiary in Mexico

It will not be part of GDP but be a part of national income

•    Goods sourced and manufactured in China andsold by Wal-Mart in the U.S.

the part of value added in the USA during the trasportation shall be part of US GDP

•    Services provided by Facebook’s data centerin India

It will form the part of Net income from abroad. But directly it can not be attributed since compensation is being paid to indians.

•    Furniture produced and sold by IKEA’ssubsidiary in Ohio

this will form part of GDP since item has been produced and sold in domestic territory.

•    AutoCAD training provided by a U.S. trainerto the architects of an architecture firm based

out of Italy

Yes it will be included since US firm is being paid for service provided.

•    Joe’s earning after selling his car to Jack

Secondhand car value shall not be added as it will lead to double accounting. only commission paid during this transction shall be included.

•    New iPhone sold in grey market

Illegal selling shall not be included in GDP but if there exist record of legal tranfer of phone from company, the it will be included.

A grey marketincludes distribution channels, which are legal but are unofficial,unauthorized, or

unintended by theoriginal manufacturer for the trade of a product.

•    Opium sold in subways and parking lots

This is illegal and black money, hence shall not form the part of GDP

•    Earnings collected by selling the ticketsof Madonna’s dance show in Tokyo

This shall not be included since it form the part of Japan GDP

•    Earnings by selling the tickets of IndianFilm Festival Awards in Texas

It will be included GDP since it part of USA GDP

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