Answer to Question #123876 in Macroeconomics for DWUMOH AUGUSTINE

Question

Indicate whether each of the following is counted in Ghana’s gross domestic product for the year 2010. Explain each of your answers.

a. The value of a used textbook sold through an online auction in 2010

b. Rent paid in 2010 by residents in an apartment building built in 2000

c. Commissions earned in 2010 by a stockbroker

d. The value of automobiles produced in 2010 entirely in South Korea by a firm fully owned by Ghanaian citizens

e. The sale of bonds in a stock market

Answer 1

A) The value of a used textbook sold through an online auction in 2010.

No it was counted in the year it was produced since it was not produced again,it could not be counted since this could result to double counting.

B) Rent paid in 2010 by residents in an apartment building built in 2000.

This is true because rent consists of income received by the households and and the business that supply the property resources. Properties have to be maintained regularly in every year. Therefore it must be included in the income approach to GDP.

C)  Commissions earned in 2010 by a stockbroker.

Yes since payment is made for productive services of the broker. The purchase of stock would not count but the work of a stock broker would.

D) The value of automobiles produced in 2010 entirely in South Korea by a firm fully owned by Ghanaian citizens.

No, GDP since the GDP measures production inside Ghana regardless of the ownership, the automobiles were not produced in Ghana.

E)  The sale of bonds in a stock market.

They are not included because GDP measures the market values of goods and services, economic activities that do not pass through the regular market channels are excluded in the computation of GDP.