The Patersons bought a home that was newly constructed in 2007 for $275,000 . They sold the home in 2015 for $255,000 . Which of the following statements is correct regarding the sale of the house?
a. The 2015 sale increased 2015 GDP by $255,000 and had no effect on 2007 GDP.
b. The 2015 sale reduced 2015 GDP by $20,000 and had no effect on 2007 GDP.
c. The 2015 sale increased 2015 GDP by $255,000; and caused 2007 GDP to be revised downward by $20,000.
d. The 2015 sale affected neither 2007 GDP nor 2015 GDP.
d
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Absolute advantage is
A) the ability to produce a good or service at a higher opportunity cost than one's competitors. B) the ability to produce more of a good or service than competitors that have fewer resources. C) the ability to produce more of a good or service than competitors when using the same amount of resources. D) the ability to produce higher quality goods compared to one's competitors.
If output per worker in a steady state is $30,000, depreciation is 13%, the population growth rate is two percent, and the saving rate is 20%, what is the steady state capital-labor ratio?
A) $10,500 B) $85,714 C) $22,500 D) $40,000