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QUESTION:

How is your purchase of a $80,000 Tesla automobile that was produced entirely in China recorded in the U.S. GDP accounts?

a. Investment increases by $80,000 and net exports increase by $80,000.

b. Consumption increases by $80,000 and net exports decrease by $80,000.

c. Net exports decrease by $80,000.

d. Net exports increase by $80,000.

e. There is no impact because this transaction does not involve domestic production.

ANSWER:

b. Consumption increases by $80,000 and net exports decrease by $80,000.


Posted by Cleveland on September 4, 2024
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