Which of the Following Would Increase the GDP of the United

question 215

Multiple Choice

Which of the following would increase the GDP of the United States?

• A) A resident of California buys a case of wine from a winery in France.
• B) A resident of Germany buys a software program from a company in Washington.
• C) A resident of Florida spends $3,000 on a vacation in Mexico.
• D) A Japanese investor purchases 100 shares of a computer company located in Illinois.

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Definitions:

Present Value

Present Value is the current worth of a future sum of money or stream of cash flows given a specified rate of return, discounting future cash flows to the present.

Fair Value Hedge

A type of hedging strategy used to mitigate risk by adjusting the fair value of a hedged asset or liability to reflect changes in market conditions.

Foreign Exchange Gain

A gain resulting from changes in exchange rates between currencies, affecting the value of foreign currency-denominated assets or liabilities.

Consolidated Income Statement

A consolidated income statement presents the financial performance of a parent company and its subsidiaries as one combined entity.