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Transactions Counted In Country GDP Assignment Paper

Which of the following transactions or activities would be counted in your country's GDP? Explain your answers. a. A transportation company acquires a fleet of second-hand vehicles. b. The same transportation company acquires 1,000 gallons of gas from a foreign company. c. You buy 10 short-term government bonds. d. A mining company acquires new government licenses to drill in the land that the company already owns. e. You pay for a new haircut at your local hairdresser. f. Foreign residents buy a bundle of your country's food specialties on an online retail site. g. Your parents spend a whole day cooking for the underprivileged. h. The local government acquires furniture for newly built schools. i. Two telecommunications companies merge. j. A nonprofit organization buys an apartment to use as its headquarters. k. You receive a large sum of money as bequest from a dead relative. Transactions Counted In Country GDP Assignment Paper
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Step-by-step
(a)

A transportation company acquires a fleet of second-hand vehicles.

Sale and purchase of second hand goods are not included in the current year's gross domestic product.

Thus,

This transaction would not be counted in the country's GDP.

(b)

The same transportation country acquires 1,000 gallons of gas from a foreign company.

The gas is being purchased from a foreign company.

So, this is an import of good.

Imported goods are not counted in a country's GDP.

Thus,

This transaction would not be counted in country's GDP.

(c)

You buy 10 short-term government bonds.

Government bonds are a financial instrument.

A sale and purchase of financial instruments like shares, stocks, bonds etc. are not counted in GDP.

Thus,

This transaction would not be counted in country's GDP.

(d)

A mining company acquires new government licenses to drill in the land that the company already owns.

License is just a permission to start a operation. It is not resulting in any direct production.

An action that does not result in production of any good or service that is can be traded in the market for monetary consideration is not included in the GDP. Transactions Counted In Country GDP Assignment Paper

Thus,

This transaction would not be counted in country's GDP.

(e)

You pay for a new haircut at your local hairdresser.

Getting this new haircut implies that service of hairdresser is availed.

Expenditure incurred on purchase of a service is included in the gross domestic product.

Thus,

This transaction would be counted in country's GDP.

(f)

Foreign residents buy a bundle of your country's food specialties on an online retail site.

This purchase of country's food specialties by foreign residents implies an export by the country.

Exports of goods and services is included in the gross domestic product.

Thus,

This transaction would be counted in country's GDP.

(g)

Your parents spend a whole day cooking for the underprivileged.

The services provided for charitable purpose or the services produced for self consumption are not included in GDP as they do not create any factor income.

Services that create factor income are included in the GDP.

Thus,

This transaction would be counted in country's GDP.

(h)

The local government acquires furniture for a newly built schools.

The government expenditure on final goods and services is included in the GDP.

In this case, government is spending on furniture (final good). Transactions Counted In Country GDP Assignment Paper

Thus,

This transaction would be counted in the country's GDP.

(i)

Two telecommunication companies merge.

This merging of two companies is not resulting in production of any final good or service.

This is just a corporate action with no immediate impact of real output produced by the country.

Thus,

This transaction would not be counted in country's GDP.

(j)

A nonprofit organization buys an apartment to use as its headquarter.

The newly built building, houses, factories, and plant etc. is included in the GDP.

However, this apartment is not a newly built building.

Sale and purchase of second hand apartment, building, house etc. would not be included in GDP.

Thus,

This transaction would not be included in country's GDP.

(k)

You receive a large sum of money as bequest from a dead relative.

A amount received as prize from a lottery or other contest, a gift from someone or a amount received as part of will of a relative or an amount received from government like unemployment allowance, old age pension are termed as transfer payments or income
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Transfer payments or income are not included in the GDP.

Thus,

This transaction would not be counted in country's GDP. Transactions Counted In Country GDP Assignment Paper

Final answer

(a)

This transaction would not be counted in country's GDP.

(b)

This transaction would not be counted in country's GDP.

(c)

This transaction would not be counted in country's GDP.

(d)

This transaction would not be counted in country's GDP.

(e)

This transaction would be counted in country's GDP.

(f)

This transaction would be counted in country's GDP.

(g)

This transaction would not be counted in country's GDP.

(h)

This transaction would be counted in country's GDP.

(i)

This transaction would not be counted in country's GDP.

(j)

This transaction would not be counted in country's GDP.

(k)

This transaction would not be counted in country's GDP.

Transactions Counted In Country GDP Assignment Paper

Expert Answer

Transactions Counted In Country GDP Assignment Paper Which of the following transactions or activities would be counted in your country's GDP? Explain your answers. a. A transportation company acquires a fleet of second-hand vehicles. b. The same transportation company acquires 1,000 gallons of gas from a foreign company. c. You buy 10 short-term government bonds. d. A mining company acquires new government licenses to drill in the land that the company already owns. e. You pay for a new haircut at your local hairdresser. f. Foreign residents buy a bundle of your country's food specialties on an online retail site. g. Your parents spend a whole day cooking for the underprivileged. h. The local government acquires furniture for newly built schools. i. Two telecommunications companies merge. j. A nonprofit organization buys an apartment to use as its headquarters. k. You receive a large sum of money as bequest from a dead relative. Transactions Counted In Country GDP Assignment Paper

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Step-by-step

(a)

A transportation company acquires a fleet of second-hand vehicles.

Sale and purchase of second hand goods are not included in the current year's gross domestic product.

Thus,

This transaction would not be counted in the country's GDP.

(b)

The same transportation country acquires 1,000 gallons of gas from a foreign company.

The gas is being purchased from a foreign company.

So, this is an import of good.

Imported goods are not counted in a country's GDP.

Thus,

This transaction would not be counted in country's GDP.

(c)

You buy 10 short-term government bonds.

Government bonds are a financial instrument.

A sale and purchase of financial instruments like shares, stocks, bonds etc. are not counted in GDP.

Thus,

This transaction would not be counted in country's GDP.

(d)

A mining company acquires new government licenses to drill in the land that the company already owns.

License is just a permission to start a operation. It is not resulting in any direct production.

An action that does not result in production of any good or service that is can be traded in the market for monetary consideration is not included in the GDP. Transactions Counted In Country GDP Assignment Paper

Thus,

This transaction would not be counted in country's GDP.

(e)

You pay for a new haircut at your local hairdresser.

Getting this new haircut implies that service of hairdresser is availed.

Expenditure incurred on purchase of a service is included in the gross domestic product.

Thus,

This transaction would be counted in country's GDP.

(f)

Foreign residents buy a bundle of your country's food specialties on an online retail site.

This purchase of country's food specialties by foreign residents implies an export by the country.

Exports of goods and services is included in the gross domestic product.

Thus,

This transaction would be counted in country's GDP.

(g)

Your parents spend a whole day cooking for the underprivileged.

The services provided for charitable purpose or the services produced for self consumption are not included in GDP as they do not create any factor income.

Services that create factor income are included in the GDP.

Thus,

This transaction would be counted in country's GDP.

(h)

The local government acquires furniture for a newly built schools.

The government expenditure on final goods and services is included in the GDP.

In this case, government is spending on furniture (final good). Transactions Counted In Country GDP Assignment Paper

Thus,

This transaction would be counted in the country's GDP.

(i)

Two telecommunication companies merge.

This merging of two companies is not resulting in production of any final good or service.

This is just a corporate action with no immediate impact of real output produced by the country.

Thus,

This transaction would not be counted in country's GDP.

(j)

A nonprofit organization buys an apartment to use as its headquarter.

The newly built building, houses, factories, and plant etc. is included in the GDP.

However, this apartment is not a newly built building.

Sale and purchase of second hand apartment, building, house etc. would not be included in GDP.

Thus,

This transaction would not be included in country's GDP.

(k)

You receive a large sum of money as bequest from a dead relative.

A amount received as prize from a lottery or other contest, a gift from someone or a amount received as part of will of a relative or an amount received from government like unemployment allowance, old age pension are termed as transfer payments or income

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Transfer payments or income are not included in the GDP.

Thus,

This transaction would not be counted in country's GDP. Transactions Counted In Country GDP Assignment Paper

Final answer

(a)