Indicate whether the following transactions would be included in GDP. If they are included, indicate which component (consumption, investment, government consumption and gross investment, or net exports) of GDP would be affected
a. A Czech student attending school in Florida takes a summer job as a lifeguard.
b. A New York company buys welding equipment from a St. Louis firm to help it build jet fighters.
c. The IRS purchases a new computer from the GATS computer company (an American-owned business producing and operating in Germany) that will allow it to better detect income tax evasion.
a. This counts as production of consumption services (life saving) in GDP.
b. This counts as an investment expenditure in GDP.
c. This counts as government gross investment in GNP but does not affect GDP.
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In the Keynesian consumption function, if current income is equal to zero, consumption spending is equal to ________
A) the marginal propensity to consume B) the average propensity to save C) autonomous consumption D) exogenous consumption
Looking at the graph shown, the structural adjustments necessary to bring the economy back to domestic and international equilibrium include:
A. an increase in the U.S. exchange rate. B. an increase in aggregate demand. C. a fall in the U.S. exchange rate. D. an increase in the U.S. wages and costs of production.