2. Activities included (and not included) in the calculation ofGDP

The gross domestic product (GDP) of the United States is defined as the all in a given period of time.

Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2020.

Scenario

2020 GDP

Included

Excluded

You chop down a cherry tree on your property in California and make a dining room table in 2020. A similar table sells for $800 in a local furniture store.

Sofaland, a Swedish furniture company, produces a table at a plant in Virginia on December 12, 2020. It sells the table to a college student on December 24.

Awake Cafe, a U.S. coffee company, produces a latte at its location in Minneapolis on January 18, 2020. It sells the latte to a customer immediately.

Roadway Motors, a U.S. automobile company, produces a convertible at a plant in Germany on March 4, 2020. Roadway Motors imports the convertible into the United States on May 28, 2020.

Graincorp, a U.S. agricultural company, produces corn syrup at a plant in Iowa on September 19, 2020. It sells the corn syrup to Crunchy's for use in the production of cereal that will be made in the United States in 2020. (Note: Focus exclusively on whether production of the corn syrup increases GDP directly, and ignore the effect of production of the cereal on GDP.)