This month, Ivan bought a new car (built in 2019) for $25,000, Erika bought a used car from Ivan for $15,000, and Stan had his 2017 model car repaired for $1,000. How much did these three car transactions contribute to the 2019 GDP?
Only newly produced finished goods and services produced within the border of the country which increase the inventories are calculated under GDP.
Resale of goods produced in past years are not included under GDP
Coming to the above question :-
Hence, only Evan's purchase of old car not included in GDP
So, Total contribution to GDP = $25,000 + $1000
= $26,000
$26,000 contributed to the 2019 GDP
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