Question

True and False

Explanation pls

and diagram if needed

Q: Ian buys 100 shares of a hot cannabis stock for $1 each on the stock market and pays a brokerage commission of $9.99. The transaction adds $109.99 to GDP.

Answer 1

Buying and selling of stocks and shares is not included in the GDP as such transaction does not result in production of real goods and services with in current year and is merely transfer of paper claims or ownership.

However, brokerage paid on buying and selling of stocks and shares will be included in the GDP as service of brokerage is provided in the current year itself.

So, in given case, this transaction will add only $9.99 (brokerage commission) to the GDP.

Hence, the given statement is False.