Problem:

Describe which of following transactions would be directly counted in the 2007’s GDP. In each case, illustrate whether the action causes a raise in Consumption, Investment, Govt. Purchases or Net Export. If the transaction is not comprised in 2007’s GDP, describe why not.

1. You buy $5000 worth of Google’s stock.

2. A record company manufactures 500, 000 CDs of the new artist. Only 100,000 are sold at the price of $15.00.

3. You bought a 1999 Lexus for 25,000 and then buy a set of special tires for $1600.

You fix your friend’s car saving him $300.00 and in return, he paints your house saving you $400.00.