GDP: Is it Counted and where?
a family pays a contractor $100,000 for house he built for them this year
consumption spending; if you are buying the home, consumer spending
apple computer co. builds a new factory in the US
investment (business) spending
at the end of the year, a flour milling firm finds that its inventories of grain and flour are $10,000 above the amts of its inventories at the start of the year
investment (business) spending
ford motor co. buys new auto-making robots
investment (business) spending
a family pays $75,000 for a house built three years ago
not counted
a homemaker works hard caring for her spouse and kids
not counted; do it yourself
RJ Reynolds Co buys control of Nabisco
not counted; transfer of ownership
you buy general motors corp stock for $1000 in stock market
not counted; transfer of ownership
the government makes a $300 social security payment to a retired person
not counted; transfer payment
you buy a new Toyota that was made in Japan
Net exports; an import
an accountant pays a tailor $175 to sew a suit for her
consumption spending
you pay $300 a month to rent an apartment
consumption spending
you pay tuition to attend college
consumption spending
you spend $7 to attend a movie
consumption spending
the government increases its defense expenditures by $1,000,000,000
government spending