Classify the given goods according to whether or not they would be included in calculating the GDP for the United States. All goods should be placed. If a country is not specified, you can assume the action is performed in the United States.

ITEMS TO BE INCLUDED IN THE GDP

1. Honda;s assembly and sales of cars in the U.S.

2. Old Navy Purchases mannequins to display clothes

ITEMS NOT TO BE INCLUDED IN THE GDP OF THE UNITED STATES

1. GM's Assembly and sales of cars in Mexico

2.Resale of used textbooks to college students

3. Ocean spray purchases plastic to make bottles

4. Sales of wheat to Mrs. Baird's Bakery

Explanation:

Completion of the Question is as follows:

The following should be placed into  two groups: Group  A represents items to be included in the GDP of the U.S and Group B represents items not be included in the GDP of the U.S.

The Items are as follows:

GM's Assembly and sales of cars in Mexico

Old Navy Purchases mannequins to display clothes

Resale of used textbooks to college students

Ocean spray purchases plastic to make bottles

Honda;s assembly and sales of cars in the U.S.

Sales of wheat to Mrs. Baird's Bakery

Solution

Gross Domestic Product (GDP)

The GDP of a nation is the measure of the market value all finished products, goods and services manufactured or rendered within the borders of a particular country and within a period of time usually one year.

This means that any good produced in another country for instance Germany will not be included in the GDP of the United States. Also, GDP considers only finished goods, hence, intermediate or raw materials for finished goods will also not be included in the GDP calculation.

Based on the explanation, the classification is as follows

ITEMS TO BE INCLUDED IN THE GDP

1. Honda's assembly and sales of cars in the U.S. - The cars were assembled in the United States which is a part of production, hence, they qualify for GDP calculation

2. Old Navy Purchases mannequins to display clothes- The Mannequins were bought as a company's finished products and will not be used to produce any new product. They are already in their finished form

ITEMS NOT TO BE INCLUDED IN THE GDP OF THE UNITED STATES

1. GM's Assembly and sales of cars in Mexico- General Motors assembled the cars in Mexico and this does not qualify as manufactured in the United States.

2.Resale of used textbooks to college students- The textbooks were already calculated for GDP in their year of production, hence, a resale value will not qualify for GDP calculation

3. Ocean spray purchases plastic to make bottles - The plastic purchased represent intermediate goods for further processing of bottles, they are raw materials and not finished goods.

4. Sales of wheat to Mrs. Baird's Bakery - The wheat purchased represent intermediate material for further processing of bread, it is a raw material required to produce a finished product - bread.

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