Explain How Each of the Following Transactions Would Affect GDP

question 137

Essay

Explain how each of the following transactions would affect GDP for the current year.Which spending categories are affected?
(A)Ford has 10,000 newly produced cars left over at the end of the year and adds them to its inventory.
(B)The state of California repaves Highway 80.
(C)The federal government decides to increase welfare payments.
(D)You take a trip to Mexico for spring vacation.

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Definitions:

Non-controlling Interests

A minority stake in a company held by investors who do not have a controlling interest or majority of the voting rights.

Subsidiary Entity

A company that is controlled or owned, either in part or fully, by another company, known as its parent company.

Parent Entity

A company that has control over one or more subsidiaries, owing enough of their stock to influence their operations.

AASB 10

An Australian Accounting Standards Board standard that sets out the principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.