Are sales and purchases of used goods counted as part of GDP? Why ...

[debasdf]

Are sales and purchases of used goods counted as part of GDP? Why or why not?
 
  What will be an ideal response?

Question 2

Burger Queen enjoyed 1 million in profits last year. What does Burger Queen's 1 million in profits mean for its competitor, Burger Lord?
 
  A) Nothing.
  B) Burger Lord must have suffered 1 million in losses last year.
  C) Burger Lord must have also enjoyed 1 million in profits last year.
  D) Burger Queen is more efficient at serving its customers compared to Burger Lord.

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Answer to Question 1

Sales and purchases of used goods are not counted as part of GDP. GDP measures the production of final goods and services produced within a country in a given time period. So GDP for the United States for 2014 includes the goods and services produced within the United States during 2014. The point is that a used good has not been produced within the specified time period. In other words, a used automobile produced in 2012, then in 2014 traded in and resold within the United States was not produced in 2014. Because it was not produced in 2014, it is not a part of the GDP in 2014. (If the automobile was produced within the United States in 2012, the automobile was part of the U.S. GDP in 2012.)

Answer to Question 2

A