Question

Which of the following transactions is counted as investment when computing the value of GDP?

Select one:

a. Mary purchases a new laptop to watch Netflix at home

b. Camille lives in France and purchases a laptop produced in the US

c. A school district purchases new computers for schools

d. Mary purchases a new laptop to use in her web design business

Answer 1

GDP is the final production value of goods and services that is produced within the domestic boundary of a country in a financial year

it is generally measured on quarterly or yearly basis

by expenditure method it is the sum of consumption ,investment, government spending and net export

if we talk about investment then it is the type of spending that is spent now but can be used in future for example building ,machines etc

in case of Mary when she buys a new laptop for Netflix then it will come under the personal consumption

similarly goes for the web design business

when Camile purchases a laptop that is made in US so it will come under import

onlyWhen school purchases new computers for school then it will come under the investment because it will helpful for the developing the skills in the students and overall welfare in future

so the correct answer here is option C