Question
In the fictional country of Terundia the local flower shop decides to expand its business and start home deliveries. To this end, at the start
In the fictional country of Terundia the local flower shop decides to expand its business and start home deliveries. To this end, at the start of 2019 it purchases a mini-truck from a foreign man- ufacturer for a value of $20,000. They also purchase extra seeds from the local shop for $1,500 and fertilizer from a foreign distributor for $750. By the end of 2019 the residents of Terundia had bought additional flowers worth $7,200 and the residents of a neighboring country had bought flowers for a value of $10,300. By how much do the different expenditure components of GDP (Consumption (C), Investment (I), Government Expenditures (G), Exports (X) and Imports (M )) increase in 2019 as a consequence of the flower shop expansion?
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