Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Question

a. neither Mexican GDP nor U.S. GDP.
b. both Mexican GDP and U.S. GDP.
c. U.S. GDP, but it is not included in Mexican GDP.
d. Mexican GDP, but it is not included in U.S. GDP.

Answer 1

The correct answer is d. Mexican GDP, but it is not included in U.S. GDP.

Here's the reasoning:

• The motorcycle is manufactured in Mexico, so its production contributes to Mexico's Gross Domestic Product (GDP).
• Since Martin, a U.S. citizen, is buying the motorcycle while in Mexico, that purchase is not considered part of the U.S. GDP, which only includes goods and services produced within the United States.

Therefore, the purchase contributes to Mexican GDP but not to U.S. GDP.