Question
What is the answer to the following question? An Indian company buys a new machine made in Britain by a Japanese company. The machine is
What is the answer to the following question?
An Indian company buys a new machine made in Britain by a Japanese company. The machine is made entirely with British labor and British-made parts. Assume that other activities in India, Britain, and Japan are unaffected by this purchase. As a result, ____
a. India's investment and Japan's GDP increase but British GDP is unaffected
b. India's investment and GDP increase, but the GDPs of Japan and Britain are unaffected.
NOTE: The following answer was highlighted but is WRONG --
c. India'a investment increases, the GDPs of India and Britain increase but Japan's GDP remains unaffected.
d. India's investment increases, the GDPs of India and Britain increase.
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