QUESTION 14 Suppose you buy your uncles childhood house for

QUESTION 14 Suppose you buy your uncle\'s childhood house for $300,000 and rent it out to a friend for a yearly rent of $15,000. What should be added to GDP for the year? $300,000 should be added to investment, $15,000 should be added to consumption $300,000 should be added as housing services ($15,000 is not added because this is included in the $300,000) $315,000 should be added to consumption None of the above

Solution

ANS ... none of the above

the purchase of house will not be the part of GDP because it was included in the GDP when it was constructed.only productive part that means which is actually constructed in the current year will be considered. and there for the value of the house $300000 will not be included in GDP while the value of rent considered which is $15000 should be forming part of the GDP because it is earned income in the current year