Why is the sale of a used good generally not counted in current-year GDP?
Answer and explanation
Correct answer: Because its production was already counted in an earlier year
GDP is designed to measure the value of production that takes place during the current accounting period. A used car, machine, or other good was produced and counted when it was new, so selling it again does not represent new current production. The resale price may create income for a seller or an intermediary, but the old good itself is not added again. Hence option B is correct; used goods do have value, and they are not all imports.
Frequently asked questions
What is the correct answer to this question?
Because its production was already counted in an earlier year
Why is this the correct answer?
GDP is designed to measure the value of production that takes place during the current accounting period. A used car, machine, or other good was produced and counted when it was new, so selling it again does not represent new current production. The resale price may create income for a seller or an intermediary, but the old good itself is not added again. Hence option B is correct; used goods do have value, and they are not all imports.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
