Question

The gross domestic product (GDP) of the United States is defined as the all in a given period of time.

Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2017.

Scenario

2017 GDP

Included

Excluded

1.Roadway Motors, a U.S. automobile company, produces a convertible at a plant in Germany on March 10, 2017. Roadway Motors imports the convertible into the United States on May 20, 2017.
2.Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 21, 2017. It sells the car at a dealership in Houston on February 10, 2017.
3.Sofaland, a Swedish furniture company, produces a table at a plant in Virginia on December 5, 2017. It sells the table to a college student on December 24.
4.You chop down a cherry tree on your property in California and make a dining room table in 2017. A similar table sells for $800 in a local furniture store.
5.Rotato, a U.S. tire company, produces a set of tires at a plant in Michigan on September 13, 2017. It sells the set of tires to Speedmaster for use in the production of a two-door coupe that will be made in the United States in 2017. (Note: Focus exclusively on whether production of the set of tires increases GDP directly, and ignore the effect of production of the two-door coupe on GDP.)

Just need to know what ones are included or excluded?

Answer 1

The gross domestic product (GDP) of the United States is defined as the VALUE OF ALL THE LEGAL AND FINAL GOODS AND SERVICES PRODUCED in a given period of time. THEY MUST BE AVAILABLE FOR EXCHANGE ALSO, E.G. SELF-PRODUCED FOOD IS NOT INCLUDED.

1. not included, it decreases net exports and the GDP (it is included in the calculation of the GDP, but not in the GDP itself).

2. included

3. not included, it decreases net exports and the GDP (it is included in the calculation of the GDP, but not in the GDP itself).

4.not included, the table wasn't available for exchange.

5. not included, they are intermediate goods, not final goods.