Ask Question
BusinessBusiness
26 September, 17:17

A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result, a) U. S. investment and GDP increase, but German GDP is unaffected. b) U. S. investment and German GDP increase, but U. S. GDP is unaffected. c) U. S. investment, U. S. GDP, and German GDP are unaffected because tractors are intermediate goods. d) U. S. investment, U. S. GDP, and German GDP all increase.

+2
Answers (1)
  1. 26 September, 18:05
    0
    The correct answer is option a.

    Explanation:

    A Minnesota farmer buys a new tractor made in Iowa by a German company.

    This transaction will lead to an increase in US investment and US GDP. There will be no effect on German GDP.

    Since tractor is a capital good its purchase will be included as investment expenditure. Even though the company is German, the production and sale take place within the geographical boundaries of the US, the transaction will be included in the US GDP, not in German GDP.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result, a) U. S. investment and GDP increase, but German GDP ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Where's the leak ma'am?
Answers (2)
The accounting equation that reflects a relationship is often described as Assets equal Liabilities plus Net Worth. Is the equation ""Assets equal Liabilities plus Owners' Equity"" also appropriate and correct? A. YesB. NoC. Don't know
Answers (1)
Recently, much of the western United States experienced a drought condition, and water usage was restricted in Denver. Yet, even though most people used less water, the price of water did not drop.
Answers (1)
Country A wants to lower trade barriers with its neighbor, Country B. While both countries support free trade, they are both reluctant to lower their barriers because they are not sure the other country will reciprocate.
Answers (1)
Egret Consulting immediately paid $500 cash for utilities for the current month. Given the choices below, determine the general journal entry that A. Egret Consulting will make to record this transaction.
Answers (1)
New Questions in Business
In a care environment Analyse how quality standards influence positive outcomes for individuals
Answers (1)
You auscultate the abdomen of a five year old gelding. what are you evaluating
Answers (1)
The Bennis article on competencies that determine a project leader's success indicates that it is crucial to continually remind the team: A) what the deadline is. B) what is important. C) who their leader is. D) who the customer is.
Answers (1)
Kyle Carlson invested $10,000 in a savings account paying 12% interest compounded quarterly. Assuming that he makes no withdrawals, how much interest will he earn during the second quarter of the first year?
Answers (1)
Jayhawk Foods Inc. is a snack manufacturer that wants to expand globally. Few people abroad are familiar with Jayhawk Foods snacks.
Answers (1)
Home » Business » A Minnesota farmer buys a new tractor made in Iowa by a German company. As a result, a) U. S. investment and GDP increase, but German GDP is unaffected. b) U. S. investment and German GDP increase, but U. S. GDP is unaffected. c) U. S. investment, U.
Sign Up Forgot Password?