Suppose Honest Rob's Used Cars buys a used car for $2000 and resells it for $3000.The result of Honest Rob's transactions is to

Question

Quizplus · Accepted Answer

The purchase and resale of the used car is considered a market transaction, and value is added to the product through the resale. The $1000 profit made by Honest Rob's is considered a part of the national income, therefore choosing option D is correct. Option A and B are incorrect because the value of national income is not decreased by the transaction. Option C is incorrect because the resale does increase the value of national income. Option E is incorrect because the resale only added $1000 of value to the product, not $3000.

Suppose Honest Rob's Used Cars Buys a Used Car for $2000