Question

The gross domestic product (GDP) of the United States is defined as the market value of all final goods and services produced within the United States 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 2018.

a. Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 9, 2018. An elementary school student buys the chocolate bar on December 24. -------- 2018 GDP (Included/Excluded)
b. Athleticus, a U.S. shoe company, produces a pair of sneakers at a plant in Vietnam on March 27, 2018. Athleticus imports the pair of sneakers into the United States on May 18, 2018. -------- 2018 GDP (Included/Excluded)
c. Treetopplers, a U.S. lumber company, produces wood at a plant in Oregon on September 25, 2018. It sells the wood to Buildit and Partners, a developer, for use in the production of a new house that will be built in the United States in 2018. (Note: Focus exclusively on whether production of the wood increases GDP directly, and ignore the effect of production of the new house on GDP.) -------- 2018 GDP (Included/Excluded)
d. Tasty's, a U.S. fast-food company, produces a hamburger at one of its many St. Louis locations on January 14, 2018. It sells the hamburger to a customer that same day.
-------- 2018 GDP (Included/Excluded)
e. An accountant starts a client's 2018 tax return on April 14, 2019, finishing it just before midnight on April 15, 2019. -------- 2018 GDP (Included/Excluded)

Answer 1

a= Included

b= Excluded

c= Included

d= Included

e= Excluded

Step-by-step explanation:

a= The product (Chocolate was produced and sold in same year i-e, 2018)

b= Goods produced by companies having manufacturing plants in foreign countries doesn't count in the company's home country's GDP. Refer to the definition which says clearly that production of final goods within a country.

c= Yes, as they are produced and if the house was also sold in the same year than only the house would have been counted in the GDP. Because we can't count same thing twice.

d= As the final product was produced and sold in same year, it would be counted.

e= No GDP as definition implies includes only final goods, tax returns doesn't count in GDP.