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suppose you buy a new car in 2018. the price of this car is $20000. then...

suppose you buy a new car in 2018. the price of this car is $20000. then you sell this car in 2019 at the price of $17000 and buy another new car at the price of $22000. what is the contribution of these transactions to the GDP of the country in 2019?

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Answer #1

Sales of used goods and part of inventories which were produced previous years are excluded from the GDP calculation of current year.

Only newly produced goods in a current year, which increase the inventory of current year are included in GDP of current year.

So, the sale of used car in 2019, which were produced in previous year (2018) does not included in 2019 GDP.

Only the value of new car purchased in 2019 will be included in 2019 GDP.

So, the trasatransa leads to increase the GDP by $22000 in 2019.

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