Diane Coyle's Description of GDP Components

A country's economic activity for the year includes the following four transactions. Based on the standard definition of Gross Domestic Product (GDP), which of these transactions would be included in the calculation?

Calculating a Nation's Economic Output

A car manufactured in a factory in Mexico, which is owned by a U.S. company, is included in the calculation of the United States' Gross Domestic Product.

Avoiding Double-Counting in Economic Output

Analyze each economic activity and match it to the correct description of how it is treated in the calculation of a country's Gross Domestic Product (GDP).

Critiquing an Economic Output Calculation

Rationale for Economic Output Measurement Rules

Consider the following economic activities: the sale of a 10-year-old house, a student receiving a government scholarship, and a collector purchasing a rare stamp from another collector. What is the primary reason that none of these transactions are included when calculating a country's total economic output for the current year?

To avoid counting the value of an output more than once, the calculation of a country's total economic output only includes the value of ____ goods and services.

A steel mill produces $10 million worth of steel in a year. It sells $7 million of this steel to an automobile manufacturer, which the manufacturer then uses to produce cars. The remaining $3 million worth of steel is sold directly to consumers for home construction projects. What is the direct contribution of this steel production to the country's total economic output for the year?

The Three Measures of GDP: Output, Expenditure, and Income