Identify the contribution to this year\'s GDP by entering a numerical value. Do
ID: 1166493 • Letter: I
Question
Identify the contribution to this year's GDP by entering a numerical value. Do not enter dollar signs or commas. Joe sells the house he has lived in for 10 years for $200,000 and pays his real estate agent a 6% commission John buys a new car that was built last year at a cost of $12,000 and he pays $16,000 At the end of the semester Brian sells his economics textbook to his friend for $150 Sue pays $1,000 for a government bond Company X produces 15 units at a cost of $5 each and sells 12 of them for $5.50 eachExplanation / Answer
GDP or gross domestic product will add only those transaction that are related to consumption investment and government purchases of final goods, and it does not include paper transactions like purchase and sale of bonds, as well as purchase or sale of second hand goods
In case of Joe, only commission to the agent is a part of GDP. Hence add 6%*200000 = 12,000
John is buying a car whose value was added in the year of manufacturer. Only the additional profit made by seller is added. Hence add 4000.
Brian sells used books so nothing is added. Enter 0.
Sue conducts a paper transaction so nothing is added. Enter 0.
Cost of production is 15*5 which means production value is $75. Add $75 to the GDP