Samuel recently moves to Florida and lives in a home he was gifted by his grand parents. If he were to rent that place, he could have earned $20,000 per year in rent. Further, the house he owned in Maine was rented to another family for $21,000 per year. How much do the housing services provided by the two houses contribute to GDP?

Question

Philip Gray

Business

15 October, 16:11

Samuel recently moves to Florida and lives in a home he was gifted by his grand parents. If he were to rent that place, he could have earned $20,000 per year in rent. Further, the house he owned in Maine was rented to another family for $21,000 per year. How much do the housing services provided by the two houses contribute to GDP?

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Answers (1)

Know the Answer?

Eleanor Stevens · Answer 1

The answer is: increase the GDP by $41,000

Explanation:

Money paid for renting a house is included under housing services and it represents 11.9% of the GDP (2017).

Housing services includes the rent paid and the utilities. But more importantly, they also include "imputed rent" which is the rent a homeowner should have paid for renting his house.