Question

Indicate whether each of the following is counted in the United States Gross Domestic Product for the year 2008. Explain your answers. a. The value of a textbook sold through an online auction in 2008. b. Rent paid in 2008 by residents in an apartment building built in 2000. c. Commissions earned by a stockbroker in 2008. d. The value of automobiles produced in 2008 entirely in South Korea by a firm fully owned by United States citizens. e. The federal government opens a new military base in Iraq with 1000 U.S. personnel.

Answer 1

Option A, B and C will be included in the consumption

Option D is excluded from GDP computation.

Option E is included in the Government spending.

Step-by-step explanation:

Option A, B and C will be included in the consumption because all of the in-home purchases are considered as consumption which in this case is included as rental payments, textbook sold and commissions earnings for the year.

The investments in the foreign countries of US citizen are considered as imports in the year when they are made. However, the foreign assets of US citizens are not included in the GDP computation. Hence Option D is excluded from GDP computation.

The opening of military base required investment from the US federal government which is for the defense budget. This government spending of money will be included in the government spending. Hence Option E is included in the GDP computation.