. Suppose that there are two individuals in an economy, Person 1 and Person 2. Person 1 buys a second-hand car from Person 2 for $12,000. What is the change in GDP according to the Income Approach here? What is the change in each person's contribution to GDP according to the Income Approach? Suppose now instead that an individual was buying $400 of wine from a domestic producer of wine. Now suppose that this individual decides to import $400 of wine instead. What is the change in Consumption (C), Investment (I), Government Spending (G), Net Exports (NX), and GDP as calculated by the Expenditure Approach in this example? 

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Income Approach Analysis Change in GDP No Change The Income Approach measures the total income earned by factors of production labor capital land in an economy In this scenario the 12000 car sale repr... View the full answer