Calculate the Contribution to GDP That Would Be the Result

question 86

Essay

Calculate the contribution to GDP that would be the result of each of the following transactions:
(a)The government purchases an airplane for $6 million.
(b)A citizen sells a used car for $6,000.
(c)A citizen sells a used car to a dealer for $6,000,who resells it to a consumer for $7,500.
(d)A citizen sells a bond for $1,000 that they bought last year for $600.
(e)The government issues a social security check for $1,250 (ignore the administrative costs of issuing the check).

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Definitions:

Variable Costing

An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, treating fixed costs as period expenses.

Absorption Costing

An accounting method that includes all manufacturing costs (direct costs, fixed, and variable overheads) in the cost of a product.

Costing Approach

A method or system used to calculate the cost of a product, project, or service for accounting, financial, and strategic planning.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.