What should be counted into GDP, in which component? And why? Jerry, a Canadian, pays $2000 to hire Kate, an American consultant at KPMG in Detroit to work in Windsor, Canada.
a) Consumption; Because it represents spending on services within the country.
b) Investment; Because it involves spending on services that contribute to future production.
c) Government spending; Because it involves paying for services rendered by an American.
d) Net exports; Because it involves payment for services provided by a foreigner.