If Jack buys a used copy of a textbook from a friend, is the transaction included in GDP?
Explain why or why not.
What Is Gross Domestic Product:
A country's Gross Domestic Product is one of the most scrutinized metrics by economists when assessing the health and prosperity of a country. The Gross Domestic Product reflects the total value of the goods produced in a country, regardless of where they are sold.
Answer and Explanation:
The answer is no.
- This is because the GDP includes the value of items produced by a country during a given year. Including this transaction in GDP would involve double-counting since the book was initially included in GDP when the book was sold as a new, published textbook.
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Learn more about this topic:
from Economics 102: MacroeconomicsChapter 4 / Lesson 3