If a US resident (citizenship is irrelevant) buys Chinese goods, the money spent does not contribute to US domestic production, income, or expediture. The income they use to pay for the goods is based on domestic production / expenditure.

The velocity of money is the ratio of GNI to money supply. I don't see how it's relevant here.

Can you please not post like this, or like the comment upthread?

If you know more than others, that's great, but in that case, please share some of what you know so the rest of us can learn, and definitely please don't put down those who know less, even if you find them annoying sometimes.

https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...

> Income is not GDP. A US citizen buying a Chinese good does not contribute to US GDP.

It does, just not very much.

GDP is value added. So contribution of anything done in an economy is (selling price - sum of buying prices of components and services needed to make the thing). So if you buy stuff abroad for 80 USD and import it for 20 USD and sell it in US for 105 USD - you increased American GDP by 5 USD.

And if a USA retailer imports a container of some sweatshop-made clothing for $5 each and retails them for $50 each, that's $5 in China's GDP and $45 for USA GDP, because technically the import-to-retail markup is added value.