Unformatted text preview: Nothing is produced hence no influence on GDP o Private transfer payments (e.g. monetary gifts from one individual to another) Again, nothing is produced o Securities transactions (e.g. stocks) Wealth of nation has not increased, it’s simply money changing hands • The fee of broker is incorporated though, b/c he/she provides a service • IPO (initial public offering) is counted in GDP b/c companies use the money for production o Secondhand sales (e.g. used cars, homes, etc.) If you make improvements on the home, then that does count for GDP b/c something was produced value went up o Non-market production Production that is not filtered through market has no value for calculating GDP (e.g. cleaning, cooking)...
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- Spring '07
- Macroeconomics, gross domestic product, Value added, GDP b/c companies