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For Each of The Following Transactions Determine The Contribution To

This document lists seven transactions and asks to determine the contribution of each to GDP and explain the effects on product, income, and expenditure accounts. The transactions include: a) purchasing plywood, b) purchasing a mansion, c) a homemaker entering the workforce, d) building an auto plant in Canada, e) winning a lottery, f) receiving payment to appear in an advertisement, and g) replacing a car rental fleet.

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141 views1 page

For Each of The Following Transactions Determine The Contribution To

This document lists seven transactions and asks to determine the contribution of each to GDP and explain the effects on product, income, and expenditure accounts. The transactions include: a) purchasing plywood, b) purchasing a mansion, c) a homemaker entering the workforce, d) building an auto plant in Canada, e) winning a lottery, f) receiving payment to appear in an advertisement, and g) replacing a car rental fleet.

Uploaded by

trilocksp Singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Solved: For each of the following transactions determine

the contribution to
For each of the following transactions determine the contribution to

For each of the following transactions, determine the contribution to the current year's GDP.
Explain the effects on the product, income, and expenditure accounts.

a. On January 1, you purchase 10 sheets of plywood at $20 per sheet. The lumber store
purchased the plywood the previous week at a wholesale price (transportation included) of $15
per sheet.

b. Colonel Hogwash purchases a West Vancouver mansion for $1,000,000. The broker's fee is
6%.

c. A home maker enters the workforce, taking a job that will pay $20,000 over the year. The
home maker must pay $8000 over the year for professional child-care services.

d. The Japanese build an auto plant in Quebec for $100,000,000, using only local labour and
materials. {The auto plant is a capital good produced by Canadians and purchased by the
Japanese.)

e. You are informed that you have won $3,000,000 in Lotto 6/49, to be paid to you, in total,
immediately.

f. The lottery corporation pays you an additional $5000 fee to appear in a TV commercial
publicizing the provincial lottery.

g. Discount Car Rentals replaces its rental fleet by buying $100,000,000 worth of new cars from
General Motors. It sells its old fleet to a consortium of used-car dealers for $40,000,000. The
consortium resells the used cars to the public for a total of $60,000,000.

For each of the following transactions determine the contribution to

ANSWER
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