Answer to Question #300957 in Macroeconomics for Mahabub

Question

Explain whether or not, why, and how the following items are included in the calculation

of GDP?

a) Suppose that the appliance store buys a refrigerator from the manufacturer on December 15, 2016

for Tk. 25,000, and that you then buy on August 5, 2017 for Tk. 40,000. What is the contribution to

GDP in fiscal year FY 2017 (July 2016 to June 2017)?

Answer 1

The only value included in calculating the GDP is Tk 25,000. This is because it's the original value of Production of the refrigerator.

Tk 40000 will not be included since it is a second hand price and represents no Production.