Question

Suppose the following transactions

occur during the current year:
1. Felix orders 40 bottles of wine from a French distributor at a price of $30.00 per bottle.
2. A U.S. company sells 200 spark plugs to a Korean company at $5.00 per spark plug.
3.
Larry, a U.S. citizen, pays $670 for a surfboard he orders from Greatwaves (a U.S. company)

Complete the following table by indicating how the combined effects of these transactions will be reflected in the U.S. national accounts for the current year.
Hint: Be sure to enter a "0" if none of the transactions listed are included in a given category and to enter a minus sign when the balance is negative.

amount in dollars

Consumption $
Investment $
Government Purchases $
Imports $
Exports $
Net Exports $
Gross Domestic Product (GDP) $

Answer 1

Answer:

Explanation:

Consumption $  670

Investment $  0

Government Purchases $ 0

Imports $  1200 (40 bottles * $30)

Exports $  1000 (200 plugs * $5)

Net Exports $  (200). This is negative as imports are greater than exports.

Gross Domestic Product (GDP) $470.

{GDP formula : Consumer expenditure  + Investment expenditure  + Government expenditure  + Total exports  - Total imports.

GDP: 670 + 1000 - 1200 = 470}