The Purchase and Sale of Financial Instruments Is Not Included

question 23

Multiple Choice

The purchase and sale of financial instruments is not included in calculations of investment spending because ________.

• A)not all of these transactions are reported to the federal government
• B)both foreign and domestic economic agents can engage in the described transactions,but only U.S.economic agents can engage in investment
• C)they do not necessarily lead to a change in the amount of output produced in the United States
• D)they are already including in consumption spending

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Definitions:

Manifestly Unreasonable

A term describing actions or decisions that are so unfair or absurd that they are immediately recognizable as unjust.

Consent Restraint

A security transfer restriction requiring a shareholder to obtain the consent of the corporation or its shareholders prior to the shareholder’s sale of her shares.

Option Agreement

A share transfer restriction granting a corporation or its shareholders an option to buy a selling shareholder’s shares at a price determined by the agreement.

Buy-and-Sell Agreement

a legally binding agreement between co-owners that outlines what will happen to an owner’s share of the business if they depart the business due to death or any other reason.