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12 July, 03:52

You spent the summer building a garage for your home. You purchased tools that cost $350 and wood that cost $4,000. A contractor would charge $25 per hour for the 40 hours of work necessary to build the garage. After you build the garage, your best friend purchases $500 of stock in Home Depot. As a result of these activities, how much does GDP rise for the current year?

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  1. 12 July, 03:53
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    the GDP will incrase by 4,350

    Explanation:

    350 + 4000 = 4,350 final goods used.

    The resale items are not considered for the GDP as they were count at first purchase.

    The wages will not be considered as they weren't paid thus, didn't qualify as expenditures. Also, as they weren't paid it cannot be counted towards the income approach neither as none income was received for them. Therefore, they add zero.
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