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When a u.s. company purchases and imports electronic parts from china to use to produce mp3 players within the united states, this purchase increases the component of gdp while also net exports by the same amount. therefore, the purchase of electronic parts from china causes in us gdp.?

Sagot :

Parrain

Answer: investment; reducing; no net change

Explanation:

When a U.S. company purchases and imports electronic parts from China to use to produce mp3 players within the United States, this purchase increases the investment component of GDP while also reducing net exports by the same amount.

Therefore, the purchase of electronic parts from China causes no net change in US GDP.

The purchase of electronic parts from China will count towards Investment as the parts acquired will enable the company to produce goods.

As the purchase is from firms outside the country, it will count as Imports. Net Exports is calculated by deducting imports from exports so more imports reduce net exports.

With Investment going up and Net exports going down by the same amount, there will be no change in GDP as both Investment and Net Exports are components of GDP.

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