When Computing GDP from the Expenditure Side, Which of the Following

question 72

Multiple Choice

When computing GDP from the expenditure side, which of the following items is excluded from the government component?

• A)salaries to Canadian Forces officers
• B)costs of Parliamentary Committees
• C)operating costs of the Canadian Coast Guard
• D)employment- insurance benefits
• E)purchases of land by the government

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Definitions:

Fixed Costs

Costs that do not change with the level of production or sales activities within a certain range or period of time, such as rent, salaries, and insurance.

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much contributes to covering fixed costs and generating profit.

Variable Cost

Expenses that change in proportion to the volume of output or sales, including items like labor and materials.

Option To Wait

A choice or right, but not the obligation, to delay a business decision or investment, recognizing the value of flexibility in decision-making under uncertain conditions.