Read the two statements and choose the correct option.
I. Purchase of a new house by a family is counted in GDP as investment.
II. Purchase of an old house by a family is counted in GDP as investment.

Only ICorrect answerYour answerOnly IICorrect answerYour answerBoth I and IICorrect answerYour answerNeither I nor IICorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

New residential construction adds to the capital stock and is fixed investment. I is true.
An old house was counted when it was built; buying it only changes the owner. II is false.

Ten questions from Measuring National Income, at your own pace.

Ten questions from Measuring National Income, at your own pace.

Read the two statements and choose the correct option.I. Purchase of a new house by a family is counted in GDP as investment.II. Purchase of an old house by a family is counted in GDP as investment.