Question

Michael is a U.S. citizen who currently lives in St. Louis. He hires John, an authorized vintage car broker (also a U.S. citizen, living in the same city) to help sell Mike's first-generation 1965 Ford Mustang (pony car class) produced in Valencia, Venezuela. Which of the following is TRUE? Group of answer choices John's commission will be counted only in the GNP of U.S. since the car is a foreign made good. Neither the car sale, nor the commission will be reflected in the U.S. GDP. since the car is a foreign made good. Both the car sale and John's commission will be counted in the U.S. GDP Only the car sale will be counted in the U.S. GDP. Only John's commission will be counted in the U.S. GDP.

Answer 1

Answer:

Only John's commission will be counted in the U.S. GDP.

Explanation:

The gross domestic product includes the market value of all final and legal goods and services produced during a year within a country.

The sale of used goods are not included in the GDP since they are not new, but any sales commission generated by that sale will be included in the GDP. All legal services (as long as John pays taxes) are included in the GDP, and John's work as a salesperson is a service.