Question 29

A person buys a car from a different country.

This transaction exemplifies net exports in GDP because it involves the purchase of a good from an international market, thereby representing an import for the country where the purchase occurs.

A) A couple buys a new house.

This option is incorrect as it pertains to residential investment, which is included in the private domestic investment component of GDP, not net exports. The transaction does not involve international trade, thus it does not affect the net exports figure.

B) A member of Congress is paid a salary.

This option is also incorrect. Salaries of government officials are considered part of government consumption expenditures, which contribute to GDP but are unrelated to net exports. There is no transaction involving trade with other countries in this scenario.

C) A person buys a car from a different country.

This option is correct since it directly involves the import of a good from another country. The purchase of a foreign car reflects a transaction that impacts the net exports component, as it is counted as an import and affects the overall trade balance.

D) A person buys food.

This option is incorrect unless specified that the food is imported. Generally, the purchase of food does not inherently relate to net exports unless the source of the food is from a different country. Domestic food purchases do not affect the net exports figure.

Conclusion

The correct answer, the purchase of a car from a different country, clearly illustrates a transaction that influences net exports as it involves international trade. The other options either pertain to domestic transactions or government expenditures, which do not relate to the concept of net exports in GDP. Thus, option C stands out as the only relevant example for this question.