James owns two houses.He rents one house to the Johnson family for $10,000 per year.He lives in the other house.If he were to rent the house in which he lives,he could earn $12,000 per year in rent.How much do the housing services provided by the two houses contribute to GDP?

Question

Quizplus · Accepted Answer

The GDP includes the market value of all final goods and services produced within a country. The rent paid by the Johnson family ($10,000) is included in GDP as it is a market transaction. Additionally, the imputed rent for the house James lives in ($12,000) is also included in GDP, as it represents the value of housing services consumed by homeowners. Therefore, the total contribution to GDP is $22,000.

James Owns Two Houses