In the Calculation of GDP by the Expenditure Approach, Exports

question 139

Multiple Choice

In the calculation of GDP by the expenditure approach, exports from the United States must be

• A) ignored because they are not bought by U.S. citizens.
• B) added.
• C) subtracted if they are bought by foreign firms for investment purposes.
• D) subtracted because they are included in the consumption of a foreign country.

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Definitions:

Materials Quantity Variance

A calculation that shows the difference between the actual amount of materials used and the expected amount, which can indicate issues in efficiency or procurement.

Materials Price Variance

The difference between the actual cost of materials and the standard or expected cost, used to assess cost management efficiency.

Materials Quantity Variance

Materials Quantity Variance is the difference between the expected amount of materials to produce a given output and the actual amount of materials used, highlighting efficiency in material usage.

Variable Overhead

Expenses that vary with production volume, such as utility costs in a factory.