Assume there are no stock-broker commissions. Tommy buys 100 shares of General Motors stock.?

Question

A. Net exports

B. Government purchases

C. Not counted in GDP

D. Consumption

E. Investment

Answer 1

C. Not counted in GDP

[ Buying share of a domestic company has nothing to do with exports, nor is this a purchase by govt., nor does this an act of consumption. It is not Investment as defined in economics, though from the point of view of Tommy this may be personal Investment. In economic terms this is only the prchase of ownership of a Part share of General Motors - a transfer of financial wealth from some others to Tommy. The investment already made in General Motors is already in the form of factories and the purchase of shares do not add to such investment]

Answer 2

C. Not counted in GDP

GDP will not change if there is change of ownership.

Answer 3

i think its c