A truck that is produced in 2019 will not be sold until 2020. According to the definition of GDP, in which year’s GDP should it be counted? a. both years b. 2019 real GDP; 2020 nominal GDP c. 2020 d. 2019
Question
A truck that is produced in 2019 will not be sold until 2020. According to the definition of GDP, in which year’s GDP should it be counted?
a. both years
b. 2019 real GDP; 2020 nominal GDP
c. 2020
d. 2019
Solution
The correct answer is:
d. 2019
Gross Domestic Product (GDP) measures the value of goods and services produced within a country in a specific period of time. In this case, the truck was produced in 2019, so it should be included in the GDP for 2019. The sale of the truck in 2020 does not affect when the truck's value is counted in GDP. This is because GDP is calculated based on when goods are produced, not when they are sold.
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