In the year 2012,Janice Quinn sells a five-year-old car to Used Car Inc.for $3,000.In the same year,Used Car Inc.resells the car to Ima Goner for $3,500.What is the contribution of this transaction to GDP in the year 2012?
A) $0.
B) $500.
C) $3,000.
D) $3,500.
E) $6,500.

Question

Quizplus · Accepted Answer

The contribution to GDP is the value added by Used Car Inc., which is the difference between the resale price and the purchase price, i.e., $3,500 - $3,000 = $500.

In the Year 2012,Janice Quinn Sells a Five-Year-Old Car to Used