A Japanese company builds an auto plant in Tennessee for $100,000,000, using only local labor and materials. The auto plant is a capital good produced by Americans and purchased by the Japanese. Using the expenditure approach, this transaction would be recorded as A. no change in GDP since the production of the plant is a transfer to the Japanese owners. B. a $100,000,000 increase in net exports. C. a $100,000,000 increase in investment. D. $100,000,000 paid to domestic factors of production. E. a $100, 000, 000 increase in production of capital goods. Part 2 According to the income approach, this transaction would be recorded as A. a $100,000,000 increase in production of capital goods. B. a $100,000,000 increase in investment. C. no change in GDP since the production of the plant is a transfer to the Japanese owners. D. $100,000,000 paid to domestic factors of production. E. a $100,000,000 increase in net exports. Part 3 According to the product approach, this transaction would be recorded as A. a $ 100,000,000 increase in net exports. B. $100,000,000 paid to domestic factors of production. C. a $ 100,000,000 increase in production of capital goods. D . no change in GDP since the production of the plant is a transfer to the Japanese owners. E. a $100,000,000 increase in investment.
A Japanese company builds an auto plant in Tennessee for $100,000,000, using only local labor and materials. The auto plant is a capital good produced by Americans and purchased by the Japanese. Using the expenditure approach, this transaction would be recorded as A. no change in GDP since the production of the plant is a transfer to the Japanese owners. B. a $100,000,000 increase in net exports. C. a $100,000,000 increase in investment. D. $100,000,000 paid to domestic factors of production. E. a $100, 000, 000 increase in production of capital goods. Part 2 According to the income approach, this transaction would be recorded as A. a $100,000,000 increase in production of capital goods. B. a $100,000,000 increase in investment. C. no change in GDP since the production of the plant is a transfer to the Japanese owners. D. $100,000,000 paid to domestic factors of production. E. a $100,000,000 increase in net exports. Part 3 According to the product approach, this transaction would be recorded as A. a $ 100,000,000 increase in net exports. B. $100,000,000 paid to domestic factors of production. C. a $ 100,000,000 increase in production of capital goods. D . no change in GDP since the production of the plant is a transfer to the Japanese owners. E. a $100,000,000 increase in investment.
Chapter1: Making Economics Decisions
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A Japanese company builds an auto plant in Tennessee
for $100,000,000, using only local labor and materials.
The auto plant is a capital good produced by Americans
and purchased by the Japanese. Using the expenditure
approach, this transaction would be recorded as A. no
change in GDP since the production of the plant is a
transfer to the Japanese owners. B. a $100,000,000
increase in net exports. C. a $100,000,000 increase in
investment. D. $100,000,000 paid to domestic factors
of production. E. a $100,000,000 increase in
production of capital goods. Part 2 According to the
income approach, this transaction would be recorded as
A. a $100,000,000 increase in production of capital
goods. B. a $100,000,000 increase in investment. C.
no change in GDP since the production of the plant is a
transfer to the Japanese owners. D. $100,000,000 paid
to domestic factors of production. E. a $100,000,000
increase in net exports. Part 3 According to the product
approach, this transaction would be recorded as A. a $
100,000,000 increase in net exports. B. $100,000,000
paid to domestic factors of production. C. a $
100,000,000 increase in production of capital goods. D
. no change in GDP since the production of the plant is
a transfer to the Japanese owners. E. a $100,000,000
increase in investment.
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