Question

Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are

a.included in current GDP because GDP measures the value of all goods and services sold in the current year.
b.included in current GDP but valued at their original prices.
c.not included in current GDP because it is difficult to determine their value.
d.not included in current GDP because GDP only measures the value of goods and services produced in the current year.

Answer 1

Answer: Option (d) is correct.

Step-by-step explanation:

GDP is a measured in monetary terms. It includes the market value of all the final goods and services produced in a specific year. It is normally calculated on annually basis. It excludes the value of second hand goods or purchases because the value of these goods and services was already included at the time of their production.

Therefore, items produced in the past are not included in the calculation current year GDP.