Which of the Following Observations Concerning GDP Calculations Is True

question 126

Multiple Choice

Which of the following observations concerning GDP calculations is true?

• A)Goods and services produced by governments are valued at market price.
• B)Inventories are treated as if they are yet to be sold.
• C)Goods produced but not sold during the year are counted in that year's GDP.
• D)Goods that firms add to their inventories do not count in the GDP.

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Definitions:

Backward Bending

A labor supply curve that bends backward at higher wage rates, indicating that individuals may choose to work fewer hours as their income increases.

Marginal Utility

The additional satisfaction or utility that a consumer derives from consuming an additional unit of a good or service.

Price of Apple

The cost at which an apple, as a fruit or as a company's stock (Apple Inc.), can be purchased, depending on context.

Price of Orange

Refers to the cost to purchase a single unit or a specified amount of oranges in a given market.