You buy a shirt made in Vietnam. This causes consumption spending to increase by the value of the shirt, import spending to increase by the value of the shirt, and hence GDP to increase.

Question

Quizplus · Accepted Answer

GDP measures the value of goods and services produced within a country's borders. While buying a shirt made in Vietnam increases consumption and import spending, it does not increase the GDP because the shirt was not produced domestically.

You Buy a Shirt Made in Vietnam