Question

Brendan buys a used car in April 2020 from his neighbor for $20,000. After one month, he loses his job and decides to sell the car to get some cash. He sells the car for $22,000 to a car dealer. The dealer fixes a few things here and there and sells the car for $27,000 in July 2020. Because of these transactions, the 2020 nominal GDP increases by ______ dollars.

Answer 1

the increase in nominal GDP is $29,000

Step-by-step explanation:

The computation of increase in nominal GDP is as follows:

= Selling value of car + difference

= $22,000 + ($27,000 - $20,000)

= $22,000 + $7,000

= $29,000

hence, the increase in nominal GDP is $29,000

We simply added the selling value and the difference