To Calculate GDP from the Expenditure Side, One Must Add

question 50

Multiple Choice

To calculate GDP from the expenditure side, one must add together

• A)consumption, investment, government purchases, and net exports.
• B)consumption, government purchases, and interest.
• C)wages, profits, government purchases and net exports.
• D)wages, rent, interest, and profits.
• E)consumption, investment, government purchases, and exports.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as materials and labor, in contrast to fixed costs, which remain constant regardless of output levels.

Long-Run Average Total Cost Curve

A graphical representation that shows the lowest cost at which a firm can produce any given level of output in the long run, when all inputs are variable.

Output

Output refers to the amount of goods or services produced by a firm or economy within a certain period.

Physical Capital

Consists of tangible, man-made objects that a business uses to produce goods or services, such as buildings, machinery, and equipment.