If Volkswagen (a German-based firm) produces a car in Tennessee and exports it to Mexico, in which country’s GDP will the car be counted?
A. Germany’s, because Volkswagen is a German company
B. Mexico, because that is where the car is purchased
C. The United States, because that’s where it was built
D. Both Mexico and the United States
Answer: C
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If depreciation exceeds gross investment, net investment is negative
Indicate whether the statement is true or false
An increase in inflationary expectations __________ interest rate
A) raises the natural B) raises the nominal C) lowers the natural D) lowers the nominal
An increase in government expenditure shifts the AD curve __________ and an increase in taxes shifts the AD curve __________
a) rightward; rightward b) rightward; leftward c) leftward; rightward d) leftward; rightward
In a simple economy without government or foreign trade, any income not consumed is called:
A. investment. B. net investment. C. saving. D. depreciation.