Question

Suppose the following transactions occur during the current year:_______.

1. Jacques orders 30 bottles of champagne from a French distributor at a price of $75 per bottle.
2. A U.S. company sells 100 textbooks to a Canadian company at $45.00 per textbook.
3. Musashi, a U.S. citizen, pays $670 for a surfboard he orders from Greatwaves (a U.S. company).
Complete the following table by indicating how the combined effects of these transactions will be reflected in the U.S. national accounts for the current year.
Hint: Be sure to enter a "0" if none of the transactions listed are included in a given category and to enter a minus sign when the balance is negative.
Amount
(Dollars)
Consumption:
Investment:
Government Purchases:
Imports:
Exports:
Net Exports:
Gross Domestic Product (GDP):

Answer 1

Answer: See explanation

Step-by-step explanation:

a. Consumption = $670 + (30 × $75)

= $670 + $2250.

= $2920

Consumption is $2920

b. Investment = 0

c. Government Purchases = 0

d. Imports = Amount spent on foreign good = 30 × $75 = $2250

e. Exports = Amount of local goods sold to other countries = $100 × $45 = $4500

f. Net Exports = Export - Import

= $4500 - $2250.

= $2250

g. Gross Domestic Product (GDP)

= C + I + G + (X - M)

= 2920 + 0 + 0 + (2250)

= $2920 + $2250.

= $5170