Scenario: A purchase of IBM stock. Instructions: A) Does the scenario provided c

Question

Scenario: A purchase of IBM stock.

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

Note: the only circumstance under which one item may count for multiple components is if a scenario involves Consumption and Imports.

C) If you answered ‘NO” for part A: Briefly explain why it is not.

Scenario: The salary of an Asheville police officer.

Instructions:

A) Does the scenario provided count toward the GDP (yes or no)?

B) If you answered “YES” for part A: Under which component or components: Consumption (C), Investment (I), Government (G), Exports (EX) or Imports (IM).

Note: the only circumstance under which one item may count for multiple components is if a scenario involves Consumption and Imports.

C) If you answered ‘NO” for part A: Briefly explain why it is not.

Explanation / Answer

1.

A) A purchase of IBM stock will not counted towards GDP

Ans - No

C) Because transactions that are purely financial are not included in the GDP as these transactions does not represent any new production as this is only the transfer of money from one person to other no new production is taken place. So this swap of money will not affect GDP.

2. A) No, the salary of an Asheville police officer will not counted towards GDp.

C) It is so because GDP is gross domestic product, means in this the income from outside of country will not be included.

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