In 2015, 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 Hilda Goner for $3,500.What is the contribution of these transactions to GDP in the year 2015?

Question

Quizplus · Accepted Answer

The contribution to GDP is $500, which is the value added by Used Car, Inc. when it resells the car. The original sale from Janice to Used Car, Inc. does not contribute to GDP as it is a second-hand sale.

In 2015, Janice Quinn Sells a Five-Year-Old Car to Used