Question

Tobias, a Classic car enthusiast in Phoenix, occasionally offers for sale one of his classic automobiles at the Barrett-Jackson collector car auction in neighboring Scottsdale. In January 2016, Tobias put a 1929 Cadillac 341B in the auction and sold it to a buyer in Riyadh, Saudi Arabia for $167,500. What part, if any, of this transaction will be included as a part of U.S. GDP in 2016?

Answer 1

Answer:

C. Commissions and fees collected by Barrett-Jackson

Explanation:

Only the commissions and fees collected by Barrett-Jackson that will be included as part of the 2016 GDP. Cars sold at auctions are not counted in the GDP because second hand sales do not tend to involve production. Therefore, resold cars and products generally are not included in the GDP. The only scenario whereby used product resold are included in the GDP is if there has been value addition on the product.

The commissions and fees collected would fall under the income aspect of the GDP, hence are counted.