How is the value of housing services included in GDP?
A) It is valued as the annual depreciation of the house.
B) It is valued as the mortgage payment made on the house.
C) It uses the purchase price of the house in the year it is sold.
D) It is based on an estimate of its rental value.

Question

Quizplus · Accepted Answer

The value of housing services is based on an estimate of its rental value. This is because the concept of GDP is to measure the value of goods and services produced within a country's borders during a given period, and housing services are included under the category of "imputed rent" - a measure of the value of owning and living in a home that is similar to the value of renting a home. This value is estimated using data on rental prices in the market, and it is included in GDP as part of personal consumption expenditures.

How Is the Value of Housing Services Included in GDP