Question

Raphael and Susan Yamato live in Swarthmore, PA. Susan's father, Alex, 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.

A. Susan's father in Sweden orders a bottle of Vermont maple syrup from the producer's website.
B. Raphael's employer upgrades all of its computer systems using U.S.-made parts.
C. The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore.
D. Raphael buys a sweater made in Guatemala.
E. Susan gets a new video camera made in the United States.

Answer 1

The transactions are categorized as C, I, G, X, or M for U.S. GDP calculation: maple syrup import, computer system investment, highway repair government purchase, sweater import, and video camera consumption.

Step-by-step explanation:

For each of the transactions taking place in the lives of Raphael and Susan Yamato, we need to determine whether they should be included in the calculation of U.S. GDP as consumption (C), investment (I), government purchases (G), exports (X), or imports (M).

A. Susan's father ordering maple syrup from Vermont is considered an import (M) because it involves purchasing a product from another country.

B. Raphael's employer upgrading computer systems with U.S.-made parts is considered investment (I) because it involves spending on capital goods.

C. The repaving of highway PA 320 by the state of Pennsylvania is considered government purchases (G) because it involves spending on public infrastructure.

D. Raphael buying a sweater made in Guatemala is considered an import (M) because it involves purchasing a product from another country.

E. Susan getting a new video camera made in the United States is considered consumption (C) because it involves buying a product for personal use.