GDP Does Not Directly Include Intermediate Goods Because

question 335

Multiple Choice

GDP does not directly include intermediate goods because

• A) that would understate the true size of GDP.
• B) intermediate goods are not useful to consumers.
• C) that would count the intermediate goods twice.
• D) intermediate goods are not valuable.

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Definitions:

Dividend Policy

A company's approach to distributing profits back to its shareholders either in the form of cash payments or additional shares.

Equity Financing

The method of raising capital by selling company shares to investors in return for ownership stakes in the company.

Debt-equity Ratio

A financial ratio that gauges a corporation's leverage by dividing its total obligations by its stockholders' equity.

Sustainable Rate

A Sustainable Rate often refers to the growth rate at which a company can continue to grow without needing to increase financial leverage.