In the year 2012,Pete Rich purchases a painting done by Rembrandt in 1,642 for $20 million.He also pays a one percent commission to the auction house that sold the painting.What is the contribution of this transaction to GDP in the year 2012?
A) $0.
B) $200,000.
C) $2 million.
D) $20 million.
E) $20.2 million.

Question

Quizplus · Accepted Answer

The contribution to GDP is the commission paid to the auction house, which is $200,000 (1% of $20 million), as it represents the value of services provided in 2012. The purchase of the painting itself does not contribute to GDP because it is a transfer of ownership of an existing asset.

In the Year 2012,Pete Rich Purchases a Painting Done by Rembrandt