Until Recently, George Lived in a Home That Was Newly

Multiple Choice

Until recently, George lived in a home that was newly constructed in 2005. In 2005, he paid $200,000 for the brand new house. He sold the house in 2006 for $225,000. Which of the following statements is correct regarding the sale of the house?

A) The 2006 sale increased 2006 GDP by $225,000 and had no effect on 2005 GDP.
B) The 2006 sale increased 2006 GDP by $25,000 and had no effect on 2005 GDP.
C) The 2006 sale increased 2006 GDP by $225,000; furthermore, the 2006 sale caused 2005 GDP to be revised upward by $25,000.
D) The 2006 sale affected neither 2005 GDP nor 2006 GDP.