Categories of expenditures Larry and Megan Smith live in Swarthmore, PA. Their s

Question

Categories of expenditures

Larry and Megan Smith live in Swarthmore, PA. Their son, Raphael, owns his own plumbing business.

For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (EX), or imports (IM). Check all that apply.

Transaction

C

I

G

EX

IM

Transaction

C

I

G

EX

IM

Megan gets a new video camera made in the United States. Raphael buys a new set of tools to use in his plumbing business. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. Larry buys a sweater made in Guatemala. Larry's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China.

Explanation / Answer

For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP.

Megan gets a new video camera made in the United States: C Raphael buys a new set of tools to use in his plumbing business: I The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore: G Larry buys a sweater made in Guatemala: M and C Larry's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China: X

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