Answer to Question #2298 in Macroeconomics for John

Question

Indicate how each of the following activities will affect GDP:

a. You pay $600 per month to lease an apartment  while attending school.

b. You pay $8,000 to purchase a four-year-old car.

c. You have car trouble and have to pay a repair  shop $1,500 to fix the transmission of your car.

d. You pay $5,100 to purchase 100 shares of  Microsoft stock ($50 per share for the stock  plus a $100 brokerage fee).

e. You sell your 100 shares of Microsoft stock  (purchased for $5,000) for $6,000 minus a $100 brokerage fee.

Answer 1

a. You pay $600 per month to lease an apartment while attending school. - increase
b. You pay $8,000 to purchase a four-year-old car. - decrease
c. You have car trouble and have to pay a repair shop $1,500 to fix the transmission of your car. - increase
d. You pay $5,100 to purchase 100 shares of Microsoft stock ($50 per share for the stock plus a $100 brokerage fee). - no affect
e. You sell your 100 shares of Microsoft stock (purchased for $5,000) for $6,000 minus a $100 brokerage fee. - increase