The Purchase of a Share of Stock Is Excluded in the Calculation

question 271

Multiple Choice

The purchase of a share of stock is excluded in the calculation of Gross Domestic Product (GDP) because it

• A) is an intermediate good.
• B) produces value added.
• C) only represents the transfer of ownership rights.
• D) is a final service and not a good.

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Definitions:

Net Cash

The amount of cash a company has on hand after all debts and liabilities have been paid.

Investing Activities

Financial actions related to the acquisition and disposal of long-term assets and other investments not considered as cash equivalents.

Cash Dividends

Dividends paid to shareholders by a corporation, ordinarily from its profit earnings.

Net Cash

The amount of cash that is available after all debts and obligations have been settled, reflecting a company's liquidity.