The Expenditure Approach Measures GDP by Adding

question 110

Multiple Choice

The expenditure approach measures GDP by adding

• A)consumption expenditure, gross private domestic investment, net exports of goods and services, and government expenditure on goods and services.
• B)compensation of employees, rental income, corporate profits, net interest, proprietors' income, indirect taxes paid, and depreciation and subtracting subsidies paid by the government.
• C)compensation of employees, rental income, corporate profits, net interest, proprietors' income, subsidies paid by the government, indirect taxes paid and depreciation.
• D)compensation of employees, rental income, corporate profits, net interest and proprietors' income.

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Definitions:

Total Wages Paid

The aggregate amount of wages or salaries disbursed by an employer to its employees over a given period.

FUTA Tax

The Federal Unemployment Tax Act (FUTA) tax is a payroll tax paid by employers to fund state workforce agencies and unemployment insurance.

State Unemployment Taxes

Taxes paid by employers to their state government to fund unemployment insurance benefits for workers who have lost their jobs.

Payroll Tax

Taxes imposed on employers or employees, usually calculated as a percentage of the salaries that employers pay their staff.