Question

Many years ago, peggy paid $500 to put together a record collection. Today, she sold her albums at a garage sale for $100. How does this sale affect current gdp

Answer 1

Answer:

The sale of Peggy's album collection doesn't affect GDP as nothing has been newly produced in the economy. Resale of old products is not accounted into GDp

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Answer 2

Answer:

No affect

Explanation:

• Peggy's collection sales are not a sale of a new product to the economy so it does not contribute to the GDP.
• However, the first sale of the records did consider the contribution of GDP many years ago.
• Spending on used items is excluded from GDP since they were new products during the period in which they were created and included in GDP at that time.
• The real amount of output for a specific time period would be distorted if used goods sales were doubly counted.
• #SPJ3