What Does Real GDP Measure

question 181

Multiple Choice

What does real GDP measure?

• A) the dollar value of all goods
• B) economic activity and income
• C) primarily long-run trends
• D) profitability of all companies in the economy

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to record unrecorded income or expenses to ensure that the financial statements comply with the accrual basis of accounting.

Straight-Line Depreciation

A method of allocating the cost of an asset evenly over its useful life.

Accumulated Depreciation

The total depreciation of an asset up to a single point in its life, showing how much value has been diminished over time.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thereby resetting the temporary accounts for the next period.