Asked by Derek Lewis on Jun 05, 2024
Verified
Rhonda sells a house she has owned for 15 years and starts living in a rented apartment.To make it more marketable,she buys carpeting that she has professionally installed and buys wallpaper that her daughter hangs.Which items would be included in this year's gross domestic product (GDP) ?
A) The sale price of the house
B) The cost of transporting all her furnitures to the new apartment
C) The opportunity cost of Rhonda's daughter's time
D) The opportunity cost of Rhonda's time
E) The purchase price for carpet and wallpaper,and the installation fee for the carpet
Gross Domestic Product
Gross Domestic Product (GDP) is the total market value of all final goods and services produced within a country's borders in a given period, serving as a broad measure of a nation's overall economic activity.
Marketable
Referring to assets or securities that are easily sold or converted into cash without significant loss in value.
Professionally Installed
Refers to equipment or systems setup and configured by experts or certified technicians, ensuring optimal performance and compliance with standards.
- Familiarize oneself with the procedures for calculating and interpreting Gross Domestic Product, identifying what components are omitted or included.
Verified Answer
EG
Emilio GuzmanJun 10, 2024
Final Answer :
E
Explanation :
Only the purchase price for the carpet and wallpaper and installation fee for the carpet would be included in this year's GDP. The sale price of the house is not included as it is considered a transaction of an existing asset. The cost of transporting furniture is considered a cost of moving and not a production of goods and services to add to GDP. The opportunity cost of Rhonda's daughter's time and Rhonda's own time are not included as they are not transactions of goods and services in the marketplace.
Learning Objectives
- Familiarize oneself with the procedures for calculating and interpreting Gross Domestic Product, identifying what components are omitted or included.