Thread: Macroeconomics: GDP

Hello everyone,

Could someone please tell me if this is correct?

1. If a business in the US purchases paper for its employees, would it affect the US GDP?

2. An American company builds 2001 cars to be sold the following year.


My attempt:

1. Yes, it would increase the GDP, due to consumption/investment. Since it is for a buisness, I think it would be an investment, but since you are going to consume the paper and throw it away, would it just be consumption?

2. no change, it hasn't been sold yet.

Also, does anyone know the rule for when the GDP would decrease?

Thank you very much

I think they both should be recorded as the current GDP because they are both categorized under "investment" expenditures. Just as Ford spend money on its equipment, paper also counts as equipment for the accounting firm. Also changes in inventory (unsold truck) also counts in the GDP.

Does everyone agree that both should be an increae in GDP due to investments?

Thank you very much