Question

5. Which of the following money spent is not counted in U.S. GDP? a. A student buys a book in local bookstore b. A business spends money to build a new factory c. A person borrows $10,000 from a bank d. China purchases an airplane from Boeing e. None of the above f. All of the above

Answer 1

Option F.

• All of the above statements will be counted in the US GDP.
• GDP includes the value of all the final goods and services produced within an economy in a given perope of time.
• It does not include imported goods, used goods or Intermediate goods.
• The book that a student buys from a local bookstore is a final good and hence it is included in US GDP.
• Spending money on building a new factory comes under investment and is included in the GDP.
• Borrowings from banks and other financial institutions are also included in GDP.
• China purchasing airplanes from Boeing which is an American based company is the export component of GDP and hence it is counted in US GDP.