In 2002, Johnson buy a home from Black family for $175,000. It was built in 1985 by Black family for $90,000?

Question

What is the impact of this sale on GDP for 2002? Assume no realtor is involved in the sale.

A. Cannot tell by how much GDP changes without knowing the inflation rate between 1985 and 2002.

B. GDP in 2002 rises by $85,000

C. GDP in 2002 rises by $90,000

D. GDP in 2002 does not change

E. GDP in 2002 rises by $175,000

Answer 1

E

Answer 2

is it b?

Answer 3

D. GDP in 2002 does not change

GDP will not change if there is change of ownership.