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If Jack buys a used copy of a textbook from a friend, is the transaction included in GDP? Explain...

Question:

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.

Learn more about this topic:

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Gross Domestic Product: Definition and Components

from Economics 102: Macroeconomics

Chapter 4 / Lesson 3
65K

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