If you buy a five-year-old TV from a friend,the amount you paid for the TV is
A)always added to consumption expenditures but not investment.
B)always added to investment but not consumption.
C)not included in this year's GDP.
D)added to investment if the TV is expected to last more than 5 additional years and added to consumption if the TV is expected to last less than 5 additional years.
E)included in this year's GDP only if the TV set was manufactured in the United States.

Question

Quizplus · Accepted Answer

When you buy a used product from a friend, it is not considered a part of GDP since it is a transfer of existing assets rather than a production of new goods and services. The TV was produced and added to GDP during the year it was initially sold, but it is not included when transferred between individuals.

If You Buy a Five-Year-Old TV from a Friend,the Amount