A change in which of the following will have no effect on the country's GDP?

Choose 1 answer:
(A) Consumption
(B) Government spending
(C) Investment
(D) Net Exports
(E) Stocks

Question

A change in which of the following will have no effect on the country's GDP?

Choose 1 answer:
(A) Consumption
(B) Government spending
(C) Investment
(D) Net Exports
(E) Stocks

Accepted Answer

∻Solution by Steps∻ ‖ step 1 ⋮ To determine the effect on a country's GDP, we need to understand what GDP represents. GDP stands for Gross Domestic Product and is the sum of all goods and services produced within a country's borders in a specific time period. It is calculated as $ GDP = C + I + G + (X - M) $, where $ C $ is consumption, $ I $ is investment, $ G $ is government spending, and $ (X - M) $ is net exports (exports minus imports). ‖ ‖ step 2 ⋮ From the options provided, we need to identify which component does not directly affect the country's GDP. Consumption (C), government spending (G), investment (I), and net exports (X - M) are all components of GDP. Stocks, however, represent ownership in companies and do not directly reflect the production of goods and services within a country during a specific time period. Changes in stock prices or the value of stocks do not directly impact the GDP calculation. ‖ ‖ ∻Answer∻ ⋮ The correct answer is the one that does not directly affect the country's GDP. ‖ ***E*** ∻Key Concept∻ ⚹GDP Calculation Components⚹ ∻Explanation∻ ⚹GDP is calculated based on the sum of consumption, investment, government spending, and net exports. Stocks are not a direct component of GDP.◊What statistical methods can be used to analyze the impact of changes in Consumption, Government spending, Investment, and Net Exports on a country's GDP?⍭ Generate me a similar question◊⚹

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