If a Canadian Citizen Buys a Smart Phone Made in China

question 17

Multiple Choice

If a Canadian citizen buys a smart phone made in China by a Chinese firm, what is the impact on net exports and GDP?

• A) Canadian net exports and Canadian GDP decrease.
• B) Canadian net exports are unaffected, but Canadian GDP decreases.
• C) Canadian net exports and Canadian GDP are unaffected.
• D) Canadian net exports decrease, but Canadian GDP is unaffected.

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Definitions:

Gross Investment

The total amount spent on purchases of new capital assets plus replacement of worn-out or obsolete assets.

Gross National Income

The total domestic and foreign output claimed by residents of a country, including wages, salaries, and property income.

Gross Domestic Product

The sum value in currency or market terms of every finished product and service created within a country during a specified period.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured by GDP growth.