Which of the Following Statements About National- Income Accounting Is

question 88

Multiple Choice

Which of the following statements about national- income accounting is correct?

• A)The value of the expenditure on a nation's output is equal to the total income claims generated by producing that output.
• B)GDP on the expenditure side is calculated by adding up all the income claims generated by the act of production.
• C)GDP on the income side is calculated by adding up total expenditure for each of the main components of final output.
• D)The total value added in the economy is equal to the sum of all components in the circular flow of expenditure and income.
• E)GDP from the expenditure side and GDP from the income side differ by the amount of investment in the economy.

---

Definitions:

Operating Lease

An operating lease is a contract that allows for the use of an asset but does not transfer ownership rights of the asset to the lessee.

Capital Lease

A lease agreement that is classified as a purchase by the lessee for accounting purposes, as it transfers substantially all risks and rewards of ownership.

Expense Charged

An amount incurred by a business as a result of its operational activities.

Expense Recognition

The accounting principle that dictates expenses should be recorded in the period in which they are incurred, not necessarily when they are paid.