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7 August, 06:06

James owns two houses. He rents one house to the Johnson family for $10,000 per year. He lives in the other house. If he were to rent the house in which he lives, he could earn $12,000 per year in rent by doing so. How much do the housing services provided by the two houses contribute to GDP?

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  1. 7 August, 06:30
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    The total contribution to GDP is $22000.

    Explanation:

    Two houses contribute to GDP = $10000 + $12000

    = $22000 per year.

    The GDP refers to the total expenditure on the goods and services produced. Moreover, rent is also included in GDP calculation. Thus the total contribution of two houses to GDP is $22000.
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