For each of the following state which 2017 US GDP category o

For each of the following, state which 2017 U.S. GDP category or categories (C, I, G, NX) are affected and whether 2017 U.S. GDP will rise/fall/stay the same. Briefly explain.

a) In December 2017, Carr, an American, buys a bottle of champagne produced in France in 2017.

b) In January 2018, Mack, an American buys a 2017 Tesla Model S produced in California.

c) In November 2017 Cooper, an American hires a US tax accountant to help with year-end

individual tax planning.

d) In October 2017, Del Rio, an American buys a home in Castro Valley, CA. The home was just

constructed in September 2017.

Solution

A) Imports (fall)

B) Consumption (rise)

C) Consumption (rise)

D) investment (rise)