Principles of Macroeconomics 7th Edition

Published by South-Western College
ISBN 10: 1-28516-591-8
ISBN 13: 978-1-28516-591-2

Chapter 10 - Measuring a Nation's Income - Questions For Review - Page 214: 4

Answer

Sale of used goods is not reflected in GDP this is a type of transaction called SECOND-HAND SALES. Second hand sells do not count in GDP only products produced in the current year can be accounted for.

Work Step by Step

Understand that GDP measures the value of goods and services produced in a country IN A GIVEN YEAR! You cannot simply count the sale of a car from 2009 as GDP for 2017.
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