Martin, a U. S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in:

O both Mexican GDP and U. S. GDP.

O Mexican GDP, but it is not included in U. S. GDP.

O U. S. GDP, but it is not included in Mexican GDP.

O neither Mexican GDP nor U. S. GDP.

The correct answer is letter "B": Mexican GDP, but it is not included in U. S. GDP.

Explanation:

The Gross Domestic Product or GDP is the overall market value of all the goods and services a country produces. The GDP measures the size of an economy and a country's growth. A nation's GDP is determined with the following formula:

GDP = C + G + I + NX

Where:

C = private consumption or consumer spending

G = government spending

I = businesses' capital spending

NX = Net exports (exports - imports)

In that case, as Martin purchases the motorcycle in Mexico, the purchase will be part of the consumer spending of Mexico's GDP, not the U. S.