Which of the following activities would be included in the calculation of GDP for the United States?

A. Toyota, a leading Japanese automobile company, produces 25,000 Camry%26#039;s at its Kentucky plant and exports them back to Japan.





B. In his garage, Richard makes a canoe as a wedding gift for his daughter. Similar canoes sell for $1,500 in a local river sports shop.





C. Goodyear Tire Company manufactures 250,000 tires. The tires are to be sold to General Motors, which will put them on new automobiles.





D. Dell produces computers at a manufacturing facility in China.

Which of the following activities would be included in the calculation of GDP for the United States?
Need someone to do your homework =)? It%26#039;s been a while since basic economics, but here%26#039;s what I recall:





A. Yes.





B. No. Private transfers and production are not included in GDP.





C. No. Only final goods are included in GDP. The value of the tires is implicitly included in the price of the automobiles that are produced.





D. No. G*D*P measures goods produced domestically, that is, physically within the borders of the US. This would be included in the GNP, though.
Reply:A only. The production of Toyota cars in the US that are then sold in other countries counts as US exports. Gifts and tires do not count as final buisness goods. Products manufactured overseas that are then sold in the US market actually reduce GDP. The formula is:


[G +C +I +(X-M)]





G=goverment expenditure


C=consumer expenditure


I=investment


X=exports


M=imports



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