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ok, maybe too abstract an example. If a bank makes a loan (creating new money) to loan to some rich guy, who decides to pay 1B to buy a bunch of Microsoft stoc
by VirusNewbie 3y ago
ok, maybe too abstract an example. If a bank makes a loan (creating new money) to loan to some rich guy, who decides to pay 1B to buy a bunch of Microsoft stock, that counts as growing the GDP, even if the majority of the money just stays in the financial sector and never drives up the price of anything measured by CPI.
- Dylan16807 3y agoGDP measures goods and services, not stock purchases. A few trillion dollars of stocks bouncing back and forth don't change it at all.