Question

1. Which of the following contributes to this years GDP? Explain briefly in each (a) You help your friend repair his old bike. (b) Your friend takes his old bike to a mechanic to be repaired c) You sell some shares that your grandma left you. (d) You buy your first house (e) You buy a baseball card (f) You buy a plane ticket to Honduras (g) You buy my old VW beetle.

Answer 1

A. Since, I have helped my friend in getting his bike repaired. This does not have an impact of GDP. Excluded

B. Here no monetary transaction is mentioned so it will not be included.

C. Here it is mere transfer of financial asset. So, it will not be included in GDP.

D. Since, purchased new house so it will be included in the GDP.

E. Since, purchased a product so it will increase the GDP.

F. Purchase of plane ticket that is a service so it will increase GDP.

G. Purchase or sale of second hand product is not accounted in the GDP. Excluded.

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