Wednesday 23 September
 
 

Key:

A: Consumption

B: Government Expenditure

C: Investment

D: An intermediate good, not counted in GDP directly, or

E: None of the above and not counted in GDP.
 
 

1.  Gasoline purchased by a student. A. Anything bought by a "household," i.e. a person as a person, not a producer, is consumption (the only exception is when a household buys a new house; that is Investment).

2.  Gasoline purchased by the FSU Anthropology Department. FSU is part of State government, so this counts as bought by Government, so B.

3.  Gasoline purchased by a private contractor surfacing a road. D. The private contractor is part of the business sector, i.e. a firm, a producer. Gasoline is used up in producing the road, so it is an intermediate. [The product, the output, is the road; if it was paid for by a private developer, the road would be investment, because it is durable (will last more than a year) and produces other output (transport); if the road was paid for by a government, the road would be government expenditure. So the gasoline cannot be a final product, because if it was we would count it twice].

4.  Gasoline purchased by Leon County Public Works Department. B. Government; Leon County is a government.

5.  Old 1940s gasoline ration coupons purchased by a private collector. E. First, they are not newly produced -- it says 1940s. Second, this is a financial transaction, not buying output.