Which of the following will be counted in this year's GDP?

• A. A gift of money from one individual to another
• B. The purchase of a new car manufactured this year
• C. The sale of a used house
• D. The purchase of stocks and bonds

Answer: (B)

Verified step by step guidance

1. Step 1: Understand what GDP measures. Gross Domestic Product (GDP) is the total market value of all final goods and services produced within a country during a specific period, usually a year.
2. Step 2: Identify which transactions contribute to current production. Only goods and services produced in the current year count towards GDP. Transfers of existing assets or money gifts do not represent new production.
3. Step 3: Analyze each option: A gift of money from one individual to another is a transfer payment and does not involve production, so it is not counted in GDP.
4. Step 4: The sale of a used house involves a previously produced good, so it does not count towards this year's GDP because it was counted in the year it was built.
5. Step 5: The purchase of stocks and bonds represents financial transactions, not production of goods or services, so it is excluded from GDP. However, the purchase of a new car manufactured this year is a final good produced in the current year and is included in GDP.