Reference no: EM131074953
How do the following events influence GDP?
a) Each of five mothers living in a neighborhood takes care of her pre-school child in her own home.
b) The mothers share the childcare work, each one taking all five children one day a week.
c) Four of the mothers pay the fifth to take care of their children five days a week (taking care, of course, to pay the required Social Security taxes!).
d) Mary buys a new car from a dealer for $20,000.
e) Dave sells Mary a used car for $7,000.
f) Dave sells his old car to a dealer for $6,000. The dealer washes it, lists it in the classified ads and on the dealer’s web page and then sells it to Mary for $8,000.
g) A Japanese company builds a factory in Tennessee. (If this affects GDP, is it the Japanese or the American GDP?)
h) A Japanese company buys stock in a Tennessee company.
i) An earthquake destroys many structures in the business district of Santa Cruz, California. The structures are not rebuilt this year.
j) An earthquake destroys much of Santa Cruz, and within a short time the city is rebuilt as it was before.
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