Which of the Following Are Included and Which Are Excluded

question 19

Essay

Which of the following are included and which are excluded in calculating this year's GDP? Explain in each instance.(a) A monthly scholarship cheque received by an economics student.(b) The purchase of a new corncrib by a farmer.(c) The purchase of a used tractor by a farmer.(d) The cashing in of a savings bond.(e) The services of a mechanic in fixing the radiator in his own car.(f) Canada Pension Plan cheques received by a retired person.(g) An increase in business inventories.(h) Government purchase of missiles.(i) A barber's income.(j) Income received from interest on a corporate bond.(k) Cash received from selling a corporate bond.

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Definitions:

IPO

Initial Public Offering, the process by which a private company becomes publicly traded by offering its shares for the first time to the public.

Seasoned Equity Offering

When a company with publicly traded shares issues additional shares. Also known as a “secondary” or “follow-on” offering.

Primary Market

The primary market is the financial market where new securities are issued and sold for the first time, directly from the issuer.

Secondary Market

A marketplace where investors buy and sell securities or assets that have been previously issued, often through exchanges or over-the-counter markets.