Question

Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year?
a. $18,000
b. $22,000
c. $35,000
d. $39,000 or $57,000

Answer 1

Answer:

Option (b) $22,000

Explanation:

Data provided in the question:

Price for which the new car was bought from the manufacturer = $18,000

Price for which Car dealer sold the car to the Tyler = $22,000

Price for which Tyler sold the car to Camille = $17,000

Now,

We should remember that the contribution is made to the GDP only by looking at final market price of goods or the service.

Thus,

For the given case the Final market value was the price for which the car dealer sold the car to the Tyler i.e $22,000

Hence,

Option (b) $22,000