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 resale of the used car would count as a part of GDP (gross domestic product) as it involves a transaction of goods and services. The resale value of the car ($3000) would be added to GDP, while the initial purchase cost ($2000) will not be subtracted as it was already accounted for in the previous year's GDP. Hence, the net increase in GDP will be $1000.

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