Question

Sean and yvette durand live in swarthmore, pa. their son, bob, is an artist living in new york city. for each of the following transactions that occur in their lives, identify whether it is included in the calculation of u.s. gdp as part of consumption (c), investment (i), government purchases (g), exports (ex), or imports (im). (hint: check all that apply.) transaction c i g ex im bob paints a landscape and sells it to an art collector in japan. sean buys a sweater made in guatemala. the durands build an addition on their house. yvette gets a haircut. the town of swarthmore puts on a fireworks display for the fourth of july. a) Consumption (C)

b) Investment (I)
c) Government purchases (G)
d) Exports (EX)
e) Imports (IM)

Answer 1

Bob selling a painting is an export, Sean buying a sweater is an import, Durands building an addition is an investment, Yvette getting a haircut is consumption, and a fireworks display is a government purchase.

Step-by-step explanation:

The transactions can be categorized as follows:

• Bob sells a painting to an art collector in Japan. This transaction falls under Exports (EX) as it represents the sale of a good to a foreign country.
• Sean buys a sweater made in Guatemala. This transaction falls under Imports (IM) as it represents the purchase of a good from a foreign country.
• The Durands build an addition on their house. This transaction falls under Investment (I) as it represents spending on capital goods.
• Yvette gets a haircut. This transaction falls under Consumption (C) as it represents spending by individuals on services.
• The town of Swarthmore puts on a fireworks display for the Fourth of July. This transaction falls under Government purchases (G) as it represents spending by the government on goods and services.