Which of the following transactions are included in gross domestic product, and by how much does the GDP raise? A. Smith pays a carpenter $50,000 to build a garage.
B. Smith purchases $10,000 worth of materials and builds a garage, which is worth $50,000.
C. Smith goes to the woods, cut down a tree, and uses the wood to build himself a garage that is worth $50,000.
D. The Jones family sells its old house to the Reynolds family for $400,000. The Joneses then buy a newly constructed house from a builder for $500,000.
E. You purchase a used computer from a friend for $200.
F. Your university purchases a new mainframe computer from IBM, paying $25,000.
G. You win $100 in an Atlantic City casino.
H. You make $100 in the stock market.
I. You sell a used economics textbook to your college bookstore for $60.
J. You buy a new economics textbook from your college bookstore for $100.

A. Smith pays a carpenter $50,000 to build a garage.  ⇒ INCLUDED, increases GDP by $50,000 because Smith paid for the garage.

B. Smith purchases $10,000 worth of materials and builds a garage, which is worth $50,000.  ⇒ INCLUDED, increases GDP by $10,000 only because Smith built the garage himself.

C. Smith goes to the woods, cut down a tree, and uses the wood to build himself a garage that is worth $50,000.  ⇒ NOT INCLUDED, no services or goods were exchanged, it is the same as growing your own food.

D. The Jones family sells its old house to the Reynolds family for $400,000. The Joneses then buy a newly constructed house from a builder for $500,000.  ⇒ INCLUDED, increases GDP by $500,000 because the Joneses purchased anew house.

E. You purchase a used computer from a friend for $200.  ⇒ NOT INCLUDED, only new goods and services are included.

F. Your university purchases a new mainframe computer from IBM, paying $25,000.   ⇒ INCLUDED, increases GDP by $25,000 because the university purchased a new computer.

G. You win $100 in an Atlantic City casino. ⇒ NOT INCLUDED, casino earnings or lottery earnings are not considered new products or services.

G. You win $100 in an Atlantic City casino. ⇒ INCLUDED, casino industry contributes significantly to a country's economy. It accounts for 0.45% of the US GDP.

Explanation:

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