CFA Practice Question

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CFA Practice Question

Which one should be counted toward U.S. GDP?

A. When a wholesale distributor sells steak to a restaurant, the restaurant owner pays $400 to the distributor.
B. An American purchases domestic stocks at NYSE.
C. A stockbroker helps an investor buy a portfolio of stocks for $100,000, receiving $800 as commission.
Correct Answer: C

A: The steak is still an intermediate good. Only the final purchase price paid by the patron of the restaurant for the steak dinner should be counted.

B: Financial transactions are excluded from GDP since they don't involve production. They merely transfer ownership from one party to another.

C: The commission is included since it involves a service.

User Contributed Comments 3

User Comment
danlan C: It's not considered as a transaction fee.
To-be-CFA Commissions are counted in GDP.
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