Rachel decides to buy a house for $200,000. The only thing Rachel needs to do is replace all the gutters for $1,000, which she happily does. How will GDP be affected by Rachel's recent purchases? A) GDP will increase by $199,000. B) GDP will increase by $190,000. C) GDP will increase by $201,000. D) GDP will increase by $1,000.

Question

Quizplus · Accepted Answer

The purchase of an existing house does not affect GDP, as it is not a new production. However, the $1,000 spent on replacing the gutters is a new service and will increase GDP by that amount.

Rachel Decides to Buy a House for $200,000