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7. A Toronto gun shop purchases a set of new Henry and Winchester rifles from the United States for $30,000 and sells them to Canadian clients for the same amount. How does this affect Canadian GDP? (A) It increases consumption by $30,000, and thus increases GDP by $30,000. (B) It increases investment by $30,000, and hence raises GDP by $30,000. (C) It reduces GDP by $30,000, since net exports decrease by $30,000. (D) It does not affect Canadian GDP.

7. A Toronto gun shop purchases a set of new Henry and Winchester rifles from the United States for $30,000 and sells them to Canadian clients for the same amount. How does this affect Canadian GDP? (A) It increases consumption by $30,000, and thus increases GDP by $30,000. (B) It increases investment by $30,000, and hence raises GDP by $30,000. (C) It reduces GDP by $30,000, since net exports decrease by $30,000. (D) It does not affect Canadian GDP.

ECON MACRO
ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter6: Tracking The U.s. Economy
Section: Chapter Questions
Problem 1.2P
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7. A Toronto gun shop purchases a set of new Henry and Winchester rifles from the United States for $30,000 and sells them to Canadian clients for the same amount. How does this affect Canadian GDP? (A) It increases consumption by $30,000, and thus increases GDP by $30,000. (B) It increases investment by $30,000, and hence raises GDP by $30,000. (C) It reduces GDP by $30,000, since net exports decrease by $30,000. (D) It does not affect Canadian GDP.
Transcribed Image Text:7. A Toronto gun shop purchases a set of new Henry and Winchester rifles from the United States for $30,000 and sells them to Canadian clients for the same amount. How does this affect Canadian GDP? (A) It increases consumption by $30,000, and thus increases GDP by $30,000. (B) It increases investment by $30,000, and hence raises GDP by $30,000. (C) It reduces GDP by $30,000, since net exports decrease by $30,000. (D) It does not affect Canadian GDP.
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