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Which of the following transactions will be counted in US GDP?

a. Blaise from Boston grows turnips in his backyard.
b. Paxton buys a used Nintendo switch from Blaise.
c. Astrid Lugo babysits her friend's son as a favor.
d. Your car dealership repairs the transmission in your car for $3000.

User Jake Levi
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1 Answer

2 votes

Final answer:

Among the provided transactions, only the car dealership repair service for $3000 would be counted in U.S. GDP. The rest are either non-market activities or resales of used goods, which are not accounted for in GDP calculations. Hence, the correct answer is option (a) and (b).

Step-by-step explanation:

The question pertains to which transactions are counted in the U.S. Gross Domestic Product (GDP). Among the options given:

  • Blaise's home-grown turnips are not part of GDP since they are not sold in the market.
  • Paxton's purchase of a used Nintendo Switch is not counted in GDP because it's a resale of an item and doesn't represent new production.
  • Astrid Lugo's babysitting as a favor is not included in GDP as no market transaction takes place.
  • Your car dealership's repair service for $3000 is part of GDP, reflecting current economic activity for services rendered.

Looking at examples provided for reference, we know that:

  • Cost of hospital stays are included in GDP.
  • Child care provided by a licensed day care center is part of GDP.
  • A new car sale is part of GDP.
  • The iron that goes into steel for a refrigerator bought by a consumer is not counted in GDP since it's an intermediate good.
User Barnski
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