Which of the following is included in the GDP of the US Movi

Which of the following is included in the GDP of the U.S.? Movies made in China by American citizens. Olive oil made in Italy and sold in the U.S. Dresses made in the U.S. and sold in Japan. Drinks made in the U.S. by Canadian citizens.

Solution

Gross domestic product of US is the final goods and services produced in US during a given time period.

So GDP = Consumption (C) + Investments (I) + Government expense (G) + Export (X) – Import (I)

I) movies made in China by American citizens will not be part of US GDP.

II) Olive oil made in Italy and sold in the US will not be part of US GDP because it will be accounted under Consumption during computation of GDP then subtracted under Import.

III) Dresses made in US and sold in Japan will be part of US GDP because it will be accounted under Export.

IV) Drinks made in the US by Canadian citizens will be part of US GDP, as it is produced in US.

So the answer will be D (III &IV)