GDP Counts Only Final Goods and Services Because This

question 42

Multiple Choice

GDP counts only final goods and services because this

• A) method avoids including any goods that are produced this year and sold next year.
• B) method avoids double counting of goods going through several stages of production.
• C) method avoids understating the value of GDP produced during a given year.
• D) amount can be more easily determined in the marketplace.

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Definitions:

LIFO

"Last In, First Out," an inventory valuation method where the last items purchased are the first sold.

FIFO

"First-In, First-Out," an inventory valuation method where the costs of the earliest items purchased or produced are the first to be expensed.

Cost Of Goods Available

The total cost of inventory that a company has available to sell at any given time, calculated by adding the beginning inventory to the cost of goods purchased or manufactured.

FOB Destination

Freight terms indicating that the seller places the goods free on board to the buyer’s place of business, and the seller pays the freight.