« previous next »

Author Question: When you purchase 1,000 of stock in Microsoft, your purchase is an investment and hence is part of ... (Read 94 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?

Many supplement containers do not even contain what their labels say. There are many documented reports of products containing much less, or more, that what is listed on their labels. They may also contain undisclosed prescription drugs and even contaminants.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

Hip fractures are the most serious consequences of osteoporosis. The incidence of hip fractures increases with each decade among patients in their 60s to patients in their 90s for both women and men of all populations. Men and women older than 80 years of age show the highest incidence of hip fractures.

Did you know?

Acute bronchitis is an inflammation of the breathing tubes (bronchi), which causes increased mucus production and other changes. It is usually caused by bacteria or viruses, can be serious in people who have pulmonary or cardiac diseases, and can lead to pneumonia.

Did you know?

Signs of depression include feeling sad most of the time for 2 weeks or longer; loss of interest in things normally enjoyed; lack of energy; sleep and appetite disturbances; weight changes; feelings of hopelessness, helplessness, or worthlessness; an inability to make decisions; and thoughts of death and suicide.

Eye Color Is a Sex-Linked Trait in Drosophila (Part 4) Eye Color Is a Sex-Linked Trait in Drosophila (Part 4)
Developing a two part nursing diagnostic label Developing a two part nursing diagnostic label
part b part b
Inadequate Airway, Breathing and Circulation in the Trauma Patient (Part 2) Inadequate Airway, Breathing and Circulation in the Trauma Patient (Part 2)
Types of Blast Injuries (Part 1 of 2) Types of Blast Injuries (Part 1 of 2)
Video: Introduction to Diabetes

For a complete list of videos, visit our video library