If I buy Apple common stock, AAPL in a primary offering, brand new stock that has never been issued, that is, I buy it directly from Apple, not on an exchange, with the assurance from Apple, that the proceeds from this sale will be used exclusively in the production of new iphones, would my investment count in the Investment portion of GDP? Assume that the transaction, and the production of the iphones, all occur in the same year. Also assume that Apple is 100% using the proceeds in iphone production. Also, assume that the money from this stock sale is the onlymoney Apple will be using in its production of these iphones. Under these circumstances, would my investment (and others who bought the offering) count in the Investment portion of GDP? Why or why not?

Answered: If I buy Apple common stock, AAPL in a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If I buy Apple common stock, AAPL in a primary offering, brand new stock that has never been issued, that is, I buy it directly from Apple, not on an exchange, with the assurance from Apple, that the proceeds from this sale will be used exclusively in the production of new iphones, would my investment count in the Investment portion of GDP? Assume that the transaction, and the production of the iphones, all occur in the same year. Also assume that Apple is 100% using the proceeds in iphone production. Also, assume that the money from this stock sale is the onlymoney Apple will be using in its production of these iphones. Under these circumstances, would my investment (and others who bought the offering) count in the Investment portion of GDP? Why or why not?

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Gross Domestic Product, or GDP, is a measure of the value of all final goods and services produced within a country's borders during a specific period of time, usually a year. GDP is an important economic indicator as it provides a snapshot of a country's economic performance and overall standard of living.

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