Answered step by step
Verified Expert Solution
Link Copied!

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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Using Equity Audits To Create Equitable And Excellent Schools

Authors: Linda E. Skrla, Kathryn B. McKenzie, James Joseph Scheurich

1st Edition

1412939321, 978-1412939324

More Books

Students also viewed these Accounting questions