For each of the following scenarios, first determine if the transaction is going

Question

For each of the following scenarios, first determine if the transaction is going to be included in GDP or not. Then if you are including it, categorize the transactions as one of the four components of GDP expenditure: Kellie builds a new country home in Montana Ben built a new grandfather clock to display in his living room. Ben builds another grandfather clock that he sells to Emma Nick bought tickets for the Blues playoff game tonight. To better deal with illegal meth production, the Missouri legislature approves a measure to purchase drug "sniffing" drones. The Secret Service has to replace a broken down Escalade for the President's motorcade. Escalades are produced in a factory outside of Detroit. St. Louis Trucking Inc. takes advantage of the low gas prices by pre-purchasing 1 million gallons. (Assume it is US produced gas) St. Louis Trucking purchased a new call center in India. Impressed with the President's Escalade, the Prime Minister of Britain purchases one as well. To feel more like the President, Professor Sanders purchases an Escalade. (I may have to win the lotto first)

Explanation / Answer

a) Yes , Consumption
b)No
c)Yes,COnsumption
d)Yes, Consumption
e)Yes,Government Expenditure
f)Yes, Government Expenditure
g)Yes, Investment
h)No
i)Yes, Net exports
j)Yes,Consumption

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