Suppose an Apartment Complex Converts to a Condominium,so That the Former

question 310

Multiple Choice

Suppose an apartment complex converts to a condominium,so that the former renters are now owners of their housing units.Suppose further that a current estimate of the value of the condominium owners' housing services is the same as the rent they previously paid.What happens to GDP as a result of this conversion?

• A) GDP necessarily increases.
• B) GDP necessarily decreases.
• C) GDP is unaffected because neither the rent nor the estimate of the value of housing services is included in GDP.
• D) GDP is unaffected because previously the rent payments were included in GDP and now the rent payments are replaced in GDP by the estimate of the value of housing services.

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