« previous next »

Author Question: When you purchase 1,000 of stock in Microsoft, your purchase is an investment and hence is part of ... (Read 90 times)

asan beg

  • Hero Member
  • *****
  • Posts: 570
on: Jun 29, 2018
When you purchase 1,000 of stock in Microsoft, your purchase is an investment and hence is part of GDP. Is this assertion correct? Explain your answer.
 
  What will be an ideal response?

Question 2

In the figure above, the shift in the aggregate demand curve from AD1 to AD2 could be result of
 
  A) an increase in government expenditures on goods and services.
  B) a decrease in the quantity of money.
  C) a rise in the price level.
  D) a fall in the price level.
  E) an increase in taxes.


randomguy133

  • Sr. Member
  • ****
  • Posts: 310
Reply #1 on: Jun 29, 2018
Answer to Question 1

The assertion is incorrect. Your purchase of 1,000 of Microsoft stock does not increase GDP because it is the purchase of a financial asset. The investment component of GDP is the purchase of new capital goods. Your purchase of stock is not the purchase of a new capital good and hence, as a purely financial transaction, it is not included in GDP.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

According to the Migraine Research Foundation, migraines are the third most prevalent illness in the world. Women are most affected (18%), followed by children of both sexes (10%), and men (6%).

Did you know?

For pediatric patients, intravenous fluids are the most commonly cited products involved in medication errors that are reported to the USP.

Did you know?

The Romans did not use numerals to indicate fractions but instead used words to indicate parts of a whole.

Did you know?

Bisphosphonates were first developed in the nineteenth century. They were first investigated for use in disorders of bone metabolism in the 1960s. They are now used clinically for the treatment of osteoporosis, Paget's disease, bone metastasis, multiple myeloma, and other conditions that feature bone fragility.

Did you know?

Once thought to have neurofibromatosis, Joseph Merrick (also known as "the elephant man") is now, in retrospect, thought by clinical experts to have had Proteus syndrome. This endocrine disease causes continued and abnormal growth of the bones, muscles, skin, and so on and can become completely debilitating with severe deformities occurring anywhere on the body.

Plant Cell Types (Part 1) Plant Cell Types (Part 1)
Body Part, Method of Examination, and Equipment Used During the General Physical Examination Cont. Body Part, Method of Examination, and Equipment Used During the General Physical Examination Cont.
How to use L’Hospital’s Rule to find the limit of a function (Part 3) How to use L’Hospital’s Rule to find the limit of a function (Part 3)
Recent history of biochemistry shown by the introduction of new techniques. (part 1) Recent history of biochemistry shown by the introduction of new techniques. (part 1)
How to add and subtract algebraic fractions (Part 1) How to add and subtract algebraic fractions (Part 1)
Question 37 Part 2 Question 37 Part 2
Video: Deglutition

For a complete list of videos, visit our video library