If an American firm produces goods that are sold to a German household, then

Question

Quizplus · Accepted Answer

This transaction would be counted as an export for the United States, which would increase its GDP. Choice A is not correct because it refers to the German GDP accounts, not the U.S. accounts. Choice B is not correct because it suggests that net exports would not be affected, but the export would increase exports and possibly affect the trade balance. Choice C is not correct because it implies that the transaction would only affect German GDP, but it would have a direct impact on U.S. GDP as well.

If an American Firm Produces Goods That Are Sold to a German