Suppose an apartment complex converts to a condominium (i.e., the renters become owners of their apartments). What is included in GDP?
A) The rent was included in GDP; the purchases of the condominiums are not included.
B) The rent was included in GDP, and so is the purchase of the condominiums.
C) The rent was not included in GDP; the purchases of the condominiums are included.
D) The rent was not included in GDP; the purchases are not included either.

Question

Quizplus · Accepted Answer

When an apartment complex converts to condominiums, the rent previously paid by renters was included in GDP as part of housing services. However, the purchase of the condominiums is considered a transfer of ownership and does not count as part of GDP, as GDP measures the value of goods and services produced within a country in a given period, not transactions of existing assets.

Suppose an Apartment Complex Converts to a Condominium (I