Question

Ture or False(as particular as possible)

1. 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.

2. If the result of cannabis legalization in Canada is that the value added from the illegal transactions moves to a legal market, then GDP will increase and so will economic well-being.

Answer 1

1. True.

This is so because buying stocks is an investment/savings which is incorporated into the GDP calculation. Also the commission is an income generated which will have multiplier effect, so it is also included.

2. True.

This is so because it would imply that the black marketing would be legalized and the income generated from it would become a part of the white economy. The GDP would increase, and this will also increase the circulation of money in the economy, having multiplier effect, increasing the well being.