Question

Indicate what components of GDP (if any) each of the following transactions would affect.

Transaction Consumption Investment Government Net
Purchases Exports
a. Dell sells a desktop computer from its
inventory to the Johnson family.
b. Your parents buy a bottle of French wine.
c. Honda expands its factory in Ohio.
d. California hires workers to repave Highway 101.
e. The federal government sends your grandmother
a Social Security check.
f. You pay a hairdresser for a haircut.
g. Your parents buy a new house from a local builder.
h. Uncle Henry buys a new refrigerator from a domestic
manufacturer.

Answer 1

a. Dell sells a desktop computer from its inventory to the Johnson family.

Component of GDP to be affected: Consumption

b. Your parents buy a bottle of French wine.

Component of GDP to be affected: Consumption

c. Honda expands its factory in Ohio.

Component of GDP to be affected: Investment

d. California hires workers to repave Highway 101.

Component of GDP to be affected: Government Purchases

e. The federal government sends your grandmother a Social Security check.

Component of GDP to be affected: No impact

f. You pay a hairdresser for a haircut.

Component of GDP to be affected:

g. Your parents buy a new house from a local builder.

Component of GDP to be affected: Consumption

h. Uncle Henry buys a new refrigerator from a domestic manufacturer.

Component of GDP to be affected: Consumption