Consider two items that might be included in GDP: (1) - 12711

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Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?

A.  Item (1) is included in the consumption component, while item (2) is included in the investment component.

B.  Item (1) is included in the investment component, while item (2) is included in the consumption component.

C.  Only item (2) is included in GDP and it is included in the investment component.

D.  Both item (1) and item (2) are included in the consumption component of GDP.

 
Solution Description

Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed