4. For each of the following transactions, determine the contribution to the current year’s GDP. Explain the effects on the product, income, and expenditure accounts.

a. On January 1, you purchase 10 liters of gasoline at

€1.80 per liter. The gas station had purchased the gasoline the previous week at the wholesale price

(transportation included) of €1.60 per liter.

b. Jorge Santiago purchases a Victorian mansion for

$1,000,000. The broker’s fee is 6%.

c. A homemaker enters the workforce in London, taking a job that will pay £40,000 over the course of the year. He incurs £16,000 during the same period for professional child care services.

d. A Japanese company builds an auto plant in Europe for €100,000,000 using only local labor and materials. (Hint: The auto plant is a capital good produced by the European workers and pur chased by the Japanese company.)

e. You are informed that you have won R3,000,000 (South African rand) in a lottery, to be paid to you in total immediately.

f. The state government pays you a fee of $5000 to appear in a TV commercial publicizing the state lottery.
g. Rent-a-Car replaces its rental fleet by buying $100,000,000 worth of new cars from Toyota. It sells its old fleet to a consortium of used-car deal ers for $40,000,000. The consortium resells the used cars to the public for a total of $60,000,000.