Ask Question
BusinessBusiness
31 March, 15:25

In early 2010 Molly paid $200,000 for a house built in 2000. She spent $30,000 on new materials to remodel the house. Although Molly lived in the house after she remodeled it, its rental value rose. Which of the following contributed to real GDP in 2010?

a) the price of the house, the cost of remodeling materials, the increase in rental value

b) the price of the house and the cost of remodeling materials, but not the increase in rental value

c) the costs of the remodeling materials and the increase in rent, but not the price of the house

d) None of the above are correct.

+4
Answers (1)
  1. 31 March, 15:43
    0
    c) the costs of the remodeling materials and the increase in rent, but not the price of the house

    Explanation:

    As for the information provided, she buys the house for $200,000 and then expenses for re-modelling the house, that is $30,000.

    After which the rent increases and accordingly there is an increase in real GDP.

    Note that the purchase of house is purchase of asset, which will not generate revenue, but applying re-modelling expense and the rent are revenue in nature and not capital. This therefore, contributes in real GDP.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “In early 2010 Molly paid $200,000 for a house built in 2000. She spent $30,000 on new materials to remodel the house. Although Molly lived ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
The revenue recognition principle dictates that revenue should be recognized in the accounting records A at the end of the month. B in the period that income taxes are paid. C when services are performed. D only when cash is received.
Answers (1)
If you are 2018 year graduate from high school what year will you graduate college
Answers (1)
You are the owner of a beauty salon. give two examples of opportunities and threats your business may face and motivate your answer
Answers (1)
The adjusted trial balance of Armstrong Corporation at December 31 shows that sales revenue for the year was $ 520 comma 000 and other revenue was $ 47 comma 000.
Answers (1)
Which definition (s) of the money supply include (s) only items which are directly and immediately usable as a medium of exchange? m1 m2 m1 and m2 neither m1 nor m2?
Answers (1)
New Questions in Business
On January 1, Kirk Corporation had total assets of $851,000. During the month, the following activities occurred: Kirk Corporation acquired equipment costing $6,100, promising to pay cash for it in 60 days.
Answers (1)
Antonio derives more utility from spending an additional dollar on boots than on gloves. We can assume that: a. the marginal utility per dollar spent on boots is greater than the marginal utility per dollar spent on gloves. b.
Answers (1)
Which profession is most likely to be concerned with the effect of supervisors management styles?
Answers (1)
The primary goals of inventory managers are to maintain a sufficient quantity of inventory to meet customers' needs, ensure inventory quality meets customers' expectations and company standards, and minimize the cost of acquiring and carrying an
Answers (1)
Stacy Hanes is an African-American woman who has recently taken her first job and does not seem to like the work environment at all, Her colleagues put down her ideas at team meetings and refer to them as "stupid.
Answers (1)
Home » Business » In early 2010 Molly paid $200,000 for a house built in 2000. She spent $30,000 on new materials to remodel the house. Although Molly lived in the house after she remodeled it, its rental value rose.
Sign Up Forgot Password?