Question

Lorenzo and Neha Stewart live in Conshohocken, PA. Neha's father, Sam, lives in Sweden.

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 (X), or imports (M). Check all that apply.

Transaction

C I G X M

Neha's father in Sweden orders a bottle of Vermont maple syrup from the producer's website.

Answer 1

Neha's father's purchase of Vermont maple syrup is considered an export in U.S. GDP calculations, adding to the net exports component.

Step-by-step explanation:

When Neha's father in Sweden orders a bottle of Vermont maple syrup from the producer's website, this transaction is considered an export (X) in the context of U.S. Gross Domestic Product (GDP). This is because the good is produced within the United States and is sold to someone outside the US borders, contributing to GDP through spending on net exports. Transactions included in GDP are categorized into consumption (C), investment (I), government purchases (G), exports (X), and imports (M) based on who is purchasing and where the goods and services originate from. In this case, an increase in exports would raise the net exports component of the GDP.