Question

The given scenarios relate to the different components of the expenditure approach for this year's U.S. GDP. It is possible that a scenario does not fit this year's U.S. GDP. Classify each scenario according to what component of expenditure approach it represents Investment (I) Imports (IM) Consumption (C) Government Exports (EX) Not part of this purchases (G) year's GDP

(a). A premimum candymaker located in Tacoma, WA, sells almond candy in high-end stores in China
(b).A candy is popular in Kentucky but comes from another country
(c).Skip Dover buys a small boat as a gift.
(d).Barbie Dahl buys a 1960s ranch-style home so she can be closer to campus
(d).A popular video game in the United States is produced by a Finnish video game company
(e).This year, Skip Dover is more business focused, so he invests in stocks.
(f).Skip Dover buys his parents a home that was completed earlier this year.
(g).The average salary for a California state senator is a little over $90,000.
(h).A car manufacturer from outside the U.S. builds another car factory in Kentucky
(i). Barbie Dahl decides to take Portuguese lessons at the local college
(j).Barbie Dahl decides to take Portuguese lessons at the local college
(k).Veterans Affairs, a federal government agency, orders more paper for all their branches.
(l).A new brand of guitars, which are produced in Nashville, TN, become the must-haves for all aspiring rock stars in Europe.

Answer 1

To classify each scenario, we need to understand the components of GDP: Consumption (C), Investment (I), Government purchases (G), Exports (EX), and Imports (IM). After analyzing each scenario, we can classify them into the respective components.

Step-by-step explanation:

To classify each scenario according to the component of the expenditure approach it represents, we need to understand the different components of GDP. The components are:

1. Consumption (C): It represents consumer spending on goods and services.
2. Investment (I): It represents business spending on capital goods like machinery, equipment, and buildings.
3. Government purchases (G): It represents government spending on goods and services.
4. Exports (EX): It represents sales of goods and services to other countries.
5. Imports (IM): It represents the purchases of goods and services from other countries.

Now let's classify each scenario:

1. (a) Selling almond candy in high-end stores in China represents Exports (EX).
2. (b) Buying candy from another country represents Imports (IM).
3. (c) Buying a small boat as a gift represents Investment (I).
4. (d) Buying a ranch-style home represents Investment (I).
5. (e) Producing a popular video game represents Exports (EX).
6. (f) Investing in stocks represents Investment (I).
7. (g) Buying a completed home represents Consumption (C).
8. (h) The salary for a California state senator represents Government purchases (G).
9. (i) Building another car factory represents Investment (I).
10. (j) Taking Portuguese lessons represents Consumption (C).
11. (k) Taking Portuguese lessons represents Consumption (C).
12. (l) Ordering more paper for all their branches represents Government purchases (G).
13. (m) Selling guitars to Europe represents Exports (EX).