Question

What action causes US GDP to increase?

Japan sells Japanese bonds to the US
Japan buys US government
The US imports Japanese cars
The US exports machinery to Japan

Answer 1

Japan sells Japanese bonds to the US

Answer 2

The action of the US exporting its machinery to Japan causes the US GDP to increase.

Answer: Option D

Explanation:

GDP is roughly the sum total of the final prices of products and services generated within a country. When the United States exports the machinery manufactured within its political boundaries to Japan, Japan has to pay the price of the machinery in dollar equivalent. This adds to the price of the machinery and indirectly increases the GDP of the U.S. Further, this also increases the interest values in economy as there will be a demand for money by the people to purchase.