Tim buys a house from Betty in 2011 for $200,000. Betty receives $185,000 and $15,000 goes to Mary, the real-estate agent. Betty originally purchased the house in 2007 for $240,000. What value is added to GDP in 2011 for this transaction?

Question

Quizplus · Accepted Answer

The $15,000 commission paid to Mary, the real-estate agent, is the only value added to GDP in 2011 from this transaction, as it represents the service provided in the current year. The sale of the house itself does not add to GDP because it is not a new good or service produced in 2011.

Tim Buys a House from Betty in 2011 for $200,000