Activities included (and not included) in the calculation ofGDP
The gross domestic product (GDP) of the United States is defined as the all in a given period of time.
Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2020.
Scenario 2020 GDP Included Excluded
1. Rotato, a U.S. tire company, produces a set of tires at a plant in Michigan on September 19, 2020. It sells the set of tires to Speedmaster for use in the production of a two-door coupe that will be made in the United States in 2020. (Note: Focus exclusively on whether production of the set of tires increases GDP directly, and ignore the effect of production of the two-door coupe on GDP.)
2. Athleticus, a U.S. shoe company, produces a pair of sneakers at a plant in Vietnam on March 17, 2020. Athleticus imports the pair of sneakers into the United States on May 21, 2020. The Jones family buys an antique silver platter at an auction in upstate New York on March 17, 2020.
3. Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 12, 2020.
4. An elementary school student buys the chocolate bar on December 24. Awake Cafe, a U.S. coffee company, produces a latte at its location in Minneapolis on January 9, 2020. It sells the latte to a customer immediately.