Question

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.

Answer 1

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.