When Calculating GDP from the Expenditure Side, How Do Net

question 41

Multiple Choice

When calculating GDP from the expenditure side, how do net exports enter the equation?

• A)They may or may not be included depending on whether they are for final or intermediate goods.
• B)They are included as a separate category.
• C)They are included only if it is a positive number.
• D)They are included but as part of C, I, or G.
• E)They are NOT included because they do not represent an expenditure by Canadians.

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Definitions:

Production Possibility

A graph showing the highest possible production levels of two items, using a specific combination of resources and various factors.

Opportunity Costs

Making a choice results in the loss of potential profit that could have been earned from choosing differently.

Increasing Opportunity

In economic terms, refers to the increasing cost associated with producing additional units of a good, implying that producing more of one good requires sacrificing increasingly larger amounts of another good.

Production Possibilities

The various combinations of goods and services that can be produced by an economy given its available resources and technology, illustrating potential trade-offs and efficiency.