ATAR Notes: Forum

VCE Stuff => VCE Business Studies => VCE Subjects + Help => VCE Economics => Topic started by: insert on April 13, 2014, 10:58:06 am

Title: Aggregate Demand
Post by: insert on April 13, 2014, 10:58:06 am

Why is investment in stocks not included in aggregate demand?

thanks

Title: Re: Aggregate Demand
Post by: abcdqdxD on April 15, 2014, 07:35:24 am

Quote from: insert on April 13, 2014, 10:58:06 am

Why is investment in stocks not included in aggregate demand?

thanks

because it isn't really a form of 'production' - nothing except digital certificates are being created.. stocks simply facilitate a flow of funds (i.e. transfer of money)

Title: Re: Aggregate Demand
Post by: chasej on April 15, 2014, 01:05:10 pm

Quote from: abcdqdxD on April 15, 2014, 07:35:24 am

because it isn't really a form of 'production' - nothing except digital certificates are being created.. stocks simply facilitate a flow of funds (i.e. transfer of money)

Stock market investment isn't a good or service either by definition.

Stocks and other investments are merely a way of using income (like savings but not) and isn't expenditure (i.e. demand for goods and services).