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Q: Why financial transaction exclude in GDP?
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The financial gain made in an economic transaction?

financial gains made in an economic transaction


How does a GDP rise?

Since GDP is the total $ amount of financial transactions (buying and selling)... if you increase the number of transactions and/or the $ amount per transaction, GDP would increase. if the # of transactions in one year was 1,000,000,000 and the average $ amount per transaction was $1,000, GDP would be $1,000,000,000,000 or $1T. If the next year the # of transactions was 1,100,000,000 and the average $ amount per transaction was $1,000, GDP would be $1,100,000,000,000 or $1.1T or a 10% increase in GDP. I don't know how many transactions we had in the past year or how much the average $ amount was per transaction, but since GDP was about $14.5 trillion...it was a lot but not enough to grow GDP per capita to make people (buyers) and businesses confident enough to spend their cash or take on additional debt.


Should the purely financial transactions be included in GDP calculations?

no. remember that GDP is a measure of the total market value of a country's output at a "given time period" .When making a Pure financial transaction no "current" production has taken place.The value of what is being exchanged was already counted as part of GDP at the time it was produced.Clear cases seen in buying stocks or Bonds,its simply swapping one assets for another.In short pure financial transactions are not included to prevent DOUBLE counting.


Which transaction in economy should be included in GDP?

i think that it is consumption investment government and net exports


Why does the GDP exclude foreign production by a General Motors plant in Mexico?

Because it was produced in Mexico; therefore such production is counted for Mexico and not for the United States.

Related questions

The financial gain made in an economic transaction?

financial gains made in an economic transaction


How does a GDP rise?

Since GDP is the total $ amount of financial transactions (buying and selling)... if you increase the number of transactions and/or the $ amount per transaction, GDP would increase. if the # of transactions in one year was 1,000,000,000 and the average $ amount per transaction was $1,000, GDP would be $1,000,000,000,000 or $1T. If the next year the # of transactions was 1,100,000,000 and the average $ amount per transaction was $1,000, GDP would be $1,100,000,000,000 or $1.1T or a 10% increase in GDP. I don't know how many transactions we had in the past year or how much the average $ amount was per transaction, but since GDP was about $14.5 trillion...it was a lot but not enough to grow GDP per capita to make people (buyers) and businesses confident enough to spend their cash or take on additional debt.


Should the purely financial transactions be included in GDP calculations?

no. remember that GDP is a measure of the total market value of a country's output at a "given time period" .When making a Pure financial transaction no "current" production has taken place.The value of what is being exchanged was already counted as part of GDP at the time it was produced.Clear cases seen in buying stocks or Bonds,its simply swapping one assets for another.In short pure financial transactions are not included to prevent DOUBLE counting.


Which transaction in economy should be included in GDP?

i think that it is consumption investment government and net exports


What is financial agreement and exchange of money for shares?

a TRANSACTION


Inputs to the financial information system?

transaction data


How does GDP help America?

Well, GDP or Gross Domestic Product is the Financial Indicator of a country's financial health. Rising growth of GDP will mean USA will no more be dependent on financial package provided by Federal Reserve to tide over the precarious economic scenario and would facilitate in easing the acute unemployment rate plauging the country.


What is financial institution?

Financial institution is an institution that deals with financial transaction.


Does adverse selection occur before or after a transaction?

Adverse selection occurs before the financial transaction takes place


Why do hotel balance financial transaction each day?

iii


Why does the GDP exclude foreign production by a General Motors plant in Mexico?

Because it was produced in Mexico; therefore such production is counted for Mexico and not for the United States.


What is the meaning of 'muamalat'?

'Muamalat' is an Arabic word meaning financial transaction.