Question
Which of the following transactions would not be counted in GDP? Explain your answers. 1.General Motors issues new shares of stock to finance the construction
Which of the following transactions would not be counted in GDP?
Explain your answers.
1.General Motors issues new shares of stock to finance the construction of a plant.
Gross domestic product (GDP) is the final value of goods and services produced in any country with in a financial or countable year. GDP can be calculated on three types that is Real GDP, Nominal GDP and Actual GDP. Solution (a) - New share of stock issued by general motors for the purposes of investing to the construction of a plant is not counted in GDP because stock is not included in GDP. Stock is an old inventory and the production of anything from stock not counted in current GDP of all types
2.General Motors builds a new plant.
3.Company A successfully launches a hostile takeover of company B, in which company A purchases all the assets of company B.
4.Your grandmother wins $10 million in the lottery.
5.You buy a new copy of Macroeconomics textbook.
6.You buy a used copy of Macroeconomics textbook.
7.The government pays out Social Security benefits.
8.A public utility installs new antipollution equipment in its smokestacks.
9.Luigi's Pizza buys 30 pounds of mozzarella cheese, holds it in inventory for 1 month, and then uses it to make pizza (which it sells).
10.You spend the weekend cleaning your apartment.
A drug dealer sells $500 worth of illegal drugs
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