Question

Which of the following are examples of the investment component of GDP? If the statement is an example of investment as it pertains to GDP, then drag and drop it into the \" Examples of Investment\" bin. If it is not, then drag and drop it into the \"Examples of Other GDP Components\" bin. Each item should be placed into a bin.

a. Floatin Away Kayak Co. buys equipment to use in the factory
b. The government purchases new military equipment
c. all the econ consulting charges a foreign client $50,000 for services it already provided
d. tanya buys a computer for personal use
e. underfoot sneaker co. shoes are produced in the current time period but not sold in inventory

Answer 1

Step-by-step explanation:

As we know that

The Gross domestic product (GDP) comprises of consumption demand, investment, government spending, and the net exports that are come after deducting the exports from the imports

where,

Net exports = Exports + Imports

In mathematically,

GDP = Consumption + Investment + Government purchase + Net exports

So, the categorization is shown below:

a. Floatin Away Kayak Co. buys equipment to use in the factory = Investment as it is an capital expenditure

b. The government purchases new military equipment = Government purchase

c. all the econ consulting charges a foreign client $50,000 for services it already provided = Net exports

d. tanya buys a computer for personal use = Consumption

e. underfoot sneaker co. shoes are produced in the current time period but not sold in inventory = Investment that is to be added to the inventory