Suppose you spent $10,000 in 2010 remodeling your house,which you originally built for $200,000 in 2000.As a result,GDP in 2010 would:
A) not change.
B) increase by $10,000.
C) increase by $200,000.
D) increase by $210,000.

Question

Quizplus · Accepted Answer

The $10,000 spent on remodeling the house in 2010 would be considered investment and therefore would be included in the calculation of GDP for that year. However, the original construction of the house in 2000 is not considered part of GDP in 2010 as it is not a current year production. Therefore, the increase in GDP would only be the amount spent on remodeling, which is $10,000.

Suppose You Spent $10,000 in 2010 Remodeling Your House,which You