Question

For each transaction answer the following questions:

The city of Cincinnati purchases a new, German-made bus for $150,000.

1. How is the GDP of the countries mentioned affected?
   The GDP of the U.S.                            [ Select ]                       ["goes up by $150,000", "stays the same", "goes down by $150,000"]         .
   The GDP of Germany                            [ Select ]                       ["goes down by $150,000", "stays the same", "goes up by $150,000"]         .
2. In which component of each country’s GDP (C, I, G, or NX) will the transaction appear?
   C (U.S.):                            [ Select ]                       ["No", "Yes"]      
   I (U.S.):                            [ Select ]                       ["No", "Yes"]      
   G (U.S.):                            [ Select ]                       ["No", "Yes"]      
   NX (U.S.):                            [ Select ]                       ["No", "Yes"]      
   C (Germany):                            [ Select ]                       ["Yes", "No"]      
   I (Germany):                            [ Select ]                       ["No", "Yes"]      
   G (Germany):                            [ Select ]                       ["Yes", "No"]      
   NX (Germany):

Answer 1

This is basically and import for the United States and export for Germany. Consequently the GDP of the United States will decline by the amount of import and the GDP of Germany will increase the amount of export

GDP of the United States goes down by 150000

GDP of Germany goes up by 150000

For consumption investment and government expenditure in the United States, the answer is no. For net exports in the United States the answer is yes

for consumption investment and government expenditure in Germany the answer is no. For net exports in Germany the answer is yes