Question

Which category of GDP does each of the following items count in? Enter one of the following letters to correspond to consumption, investment, government purchases, net exports, or does not count (C, I, G, NX, DNC). Enter one letter only in each blank or enter DNC if the transaction does not count. Do not enter the full word.Nissan produces a car at its Tennessee plant in December, but does not intend to sell it until after the end of the year ______ , An auto parts maker buys an idle textile plant in North Carolina with the intent of converting it to a distribution center______ , The U.S. Army rents a warehouse to store surplus equipment _____, Boeing buys some new machinery for its assembly plant in South Carolina ______, A state employees' pension fund in California buys $10 million in corporate bonds_____ , A local bakery buys 500 pounds of flour to make bread ______, A doctor buys a painting to hang in his office waiting area from an artist on Etsy ______, A family rents a beach house for a week's vacation ______, A retiree in Chicago receives a Social Security check from the U.S. Treasury______ , A factory in the U.S. produces chemicals and sells them to a firm in Canada ______ .

Answer 1

Explanation:

-Nissan produces a car at its Tennessee plant in December, but does not intend to sell it until after the end of the year __DNC__ .

This transaction does not count because GDP is measured in one year. Nissan sell will be accounted in the next year GDP.

-An auto parts maker buys an idle textile plant in North Carolina with the intent of converting it to a distribution center_I__.

This is private investment of the auto parts maker.

-The U.S. Army rents a warehouse to store surplus equipment __G__.

This is a expense of the U.S government.

-A state employees' pension fund in California buys $10 million in corporate bonds__G__.

This is a expense of the U.S government.

-A local bakery buys 500 pounds of flour to make bread __I__.

This is private investment of the bakery.

-A doctor buys a painting to hang in his office waiting area from an artist on Etsy __I__

This is private investment because if his office looks better maybe this will attract more clients.

-A family rents a beach house for a week's vacation __C__.

This is household’s consumption.

-A retiree in Chicago receives a Social Security check from the U.S. Treasury__G___  

This is an expense of the U.S government.

-A factory in the U.S. produces chemicals and sells them to a firm in Canada __NX___ .

This fits in the net exports account as an export.