Larissa buys and lives in a newly constructed home she paid $400,000 for in 2019. She sells the house in 2020 for $450,000. How is GDP impacted?

Question

Quizplus · Accepted Answer

GDP measures the value of goods and services produced within a country in a specific period. The sale of a pre-existing or used asset, like a home built and sold in a previous year, does not contribute to the current year's GDP. The initial construction and sale of the home in 2019 would have been included in the 2019 GDP, but the resale in 2020 does not produce new goods or services, thus has no impact on 2020 GDP.

Larissa Buys and Lives in a Newly Constructed Home She