Are stocks and bonds considered part of the investment component of GDP?
What will be an ideal response?
No, stocks and bonds are not part of the investment component of GDP. The investment component of GDP includes the purchase of new capital goods and changes in inventories. Stocks and bonds are not capital goods and are not changes in inventories, so they are not part of investment.
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An individual plans to borrow a sum of $10,000 for one year. The nominal interest charged on the borrowed sum is 6%
a. If he takes the loan, what will be the interest amount and the total amount that he would have to pay at the end of the year? b. If the rate of inflation in the economy is 10%, then is it a good idea for him to take the loan? Why or why not?
A shortage results when a
a. nonbinding price ceiling is imposed on a market. b. nonbinding price ceiling is removed from a market. c. binding price ceiling is imposed on a market. d. binding price ceiling is removed from a market.