b. Gross domestic product does not include the value of the stocks and bonds bought and sold because these transactions are considered multiple choice 2economic investment, but should be counted as production of final goods and services.economic investment, and should not be counted as production of final goods and services.consumption expenditures, and should not be counted as production of final goods and services.consumption expenditures, but should be counted as production of final goods and services.
Question
b. Gross domestic product does not include the value of the stocks and bonds bought and sold because these transactions are considered multiple choice 2economic investment, but should be counted as production of final goods and services.economic investment, and should not be counted as production of final goods and services.consumption expenditures, and should not be counted as production of final goods and services.consumption expenditures, but should be counted as production of final goods and services.
Solution
The correct answer is: economic investment, and should not be counted as production of final goods and services.
This is because the Gross Domestic Product (GDP) measures the value of economic activity within a country. Strictly defined, GDP is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time.
When stocks and bonds are bought and sold, no new production occurs. These transactions are simply transfers of ownership of existing assets. Therefore, they are considered as economic investments, not as production of goods and services.
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