Answered step by step
Verified Expert Solution
Question
1 Approved Answer
In 2022, Tom spent $70,000 renovating his house. In the same year, he sold his house to a couple from Bacchus Marsh for $850,000. As
In 2022, Tom spent $70,000 renovating his house. In the same year, he sold his house to a couple from Bacchus Marsh for $850,000. As part of the sale, Tom paid $17,000 for real estate agent fee, $8,000 for advertising fee and $95,000 for capital gain tax.
Considering all of the above numbers, how much would GDP in 2022 increase by?
A) $850,000, which is how much Tom sold the house for
B) $95,000
C) $190,000
D) $0, GDP would be unchanged because the sale of this already established house is considered the sale of a second-hand good.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started