A bottle of wine that was produced in France is purchased in New York by a US citizen. This transaction should: Group of answer choices 1. be subtracted under imports but not show up anywhere else 2. be added under Investment 3. be added under Consumption 4. be added under consumption and subtracted under imports so that it has no net effect on US GDP.
A bottle of wine that was produced in France is purchased in New York by a US citizen. This transaction should: Group of answer choices 1. be subtracted under imports but not show up anywhere else 2. be added under Investment 3. be added under Consumption 4. be added under consumption and subtracted under imports so that it has no net effect on US GDP.
Chapter19: Measuring Economic Performance
Section: Chapter Questions
Problem 3P
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Question
A bottle of wine that was produced in France is purchased in New York by a US citizen. This transaction should:
Group of answer choices
1. be subtracted under imports but not show up anywhere else
2. be added under Investment
3. be added under Consumption
4. be added under consumption and subtracted under imports so that it has no net effect on US GDP.
Expert Solution
Step 1
Gross domestic product only consider market value of final goods and services which is produced in the country in given period of time.
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