Purely financial transactions are excluded

Assignment Help Business Economics

Reference no: EM131005197

Just need short (3 to 8 sentences) thoughts about these topics.

1. GDP is designed to measure what is produced or created over the current time period? Why Existing assets or property that sold or transferred, including used items, are not counted?

2. Discuss and explain why the following purely financial transactions are excluded?

a. Public transfer payments, like social security or cash welfare benefits.

b. Private transfer payments, like student allowances or alimony payments.

c. The sale of stocks and bonds represent a transfer of existing assets. (However, the brokers’ fees are included for services rendered.)

3. Second hand sales are excluded; why they do not represent current output? (However, any value added between purchase and resale is included, e.g. used car dealers.)

Reference no: EM131005197

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