Rhonda sells a house she has owned for 15 years.To make it more marketable, she buys carpeting and has it professionally installed, and she buys wallpaper that her daughter hangs.Which of these items would be included in this year's GDP?

Question

Quizplus · Accepted Answer

Only the sale price of the wallpaper and carpeting, and the installation fee for the carpet would be included in this year's GDP. The sale of the house is not included as it is a second-hand transaction and does not contribute to current production. The opportunity cost of Rhonda's time or her daughter's time is not included in GDP as it is not a market transaction, hence it does not have a market value.

Rhonda Sells a House She Has Owned for 15 Years