Which of the following transactions will be included in GDP for the US? Explain. <\/p>\n\n\n\n
a. Coca Cola builds a new bottling plan in the US. <\/p>\n\n\n\n
b. Delta sells one of its existing planes to Korean Air. <\/p>\n\n\n\n
c. An American buys a bottle of French Wine. <\/p>\n\n\n\n
d. An American buys a share of Disney stock. <\/p>\n\n\n\n
e. A book publisher produces too many copies of a new book. The books don’t sell this year so the publisher adds the surplus to inventories.<\/p>\n\n\n\n
The correct answer and explanation is:<\/strong><\/mark><\/p>\n\n\n\n Correct Transactions Included in U.S. GDP:<\/strong><\/p>\n\n\n\n Included in GDP: Explanation (Approximately 300 Words):<\/strong><\/p>\n\n\n\n Gross Domestic Product (GDP) is the total market value of all final goods and services<\/strong> produced within a country\u2019s borders<\/strong> during a given time period, typically a year. It only includes current production<\/strong>, and excludes financial transactions<\/strong> and second-hand sales<\/strong>.<\/p>\n\n\n\n Let\u2019s evaluate each option:<\/p>\n\n\n\n a. Coca Cola builds a new bottling plant in the US.<\/strong> b. Delta sells one of its existing planes to Korean Air.<\/strong> c. An American buys a bottle of French wine.<\/strong> d. An American buys a share of Disney stock.<\/strong> e. A book publisher produces too many copies of a new book. The books don’t sell this year so the publisher adds the surplus to inventories.<\/strong> Conclusion:<\/strong> Only (a) and (e) are included in current U.S. GDP.<\/p>\n","protected":false},"excerpt":{"rendered":" Which of the following transactions will be included in GDP for the US? Explain. a. Coca Cola builds a new bottling plan in the US. b. Delta sells one of its existing planes to Korean Air. c. An American buys a bottle of French Wine. d. An American buys a share of Disney stock. e. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-21261","post","type-post","status-publish","format-standard","hentry","category-quiz-questions"],"_links":{"self":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/21261","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/comments?post=21261"}],"version-history":[{"count":1,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/21261\/revisions"}],"predecessor-version":[{"id":21262,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/21261\/revisions\/21262"}],"wp:attachment":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/media?parent=21261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/categories?post=21261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/tags?post=21261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\u2705 a. Coca Cola builds a new bottling plant in the US.<\/strong>
\u2705 e. A book publisher produces too many copies of a new book. The books don’t sell this year so the publisher adds the surplus to inventories.<\/strong><\/p>\n\n\n\n
\n\n\n\n
\u2705 Included in GDP.<\/strong> This is an investment in physical capital (known as gross private domestic investment) and contributes to current production. It takes place within U.S. borders and reflects economic activity.<\/p>\n\n\n\n
\u274c Not included in GDP.<\/strong> This is the sale of a used good<\/strong>, which was already counted in GDP when it was originally produced and sold. Resale of used items does not count toward current GDP.<\/p>\n\n\n\n
\u274c Not included in GDP.<\/strong> This is an import<\/strong>, meaning the production occurred in France, not the U.S. Imports are subtracted<\/strong> from GDP because they do not represent domestic production.<\/p>\n\n\n\n
\u274c Not included in GDP.<\/strong> Purchasing stocks is a financial transaction<\/strong> and does not represent the production of goods or services. It is simply a transfer of ownership.<\/p>\n\n\n\n
\u2705 Included in GDP.<\/strong> Unsold goods added to inventory are considered part of investment<\/strong> (specifically, inventory investment) because they were produced in the current period. They count as part of GDP even if not sold.<\/p>\n\n\n\n