Suppose, in a given year, someone buys a Ford automobile for $30,000. That same year, Ford produced the car in Michigan, using $10,000 in parts imported from Japan. However, the parts imported from Japan themselves contained $3,000 in components produced in the United States.
a. By how much does U.S. GDP rise?
b. Using the expenditure approach, what is the change in each component (C, I, G, and NX) of U.S. GDP?
c. What is the change in Japan’s GDP and each of its components?